When you look at a graph of the growth rate itself, the data doesn’t look like a perfect fit for a line anymore.
Instead, I think the 3.5% is an average that looks good when you have a graph that is rather zoomed out, but overall isn’t that much of some sort of pattern that needs explaining.
Instead, the economy seems to fluctuate and cycle a lot, and we already have some theories of business cycles to explain why that is so.
You can also see points in history where certain geopolitical events caused lower or higher than average growth, so the idea that the GDP is seemingly immune to geopolitical events is hardly there in actuality.
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I can’t explain Moore’s Law (that’s an area I haven’t studied at all), but I’d be willing to wager that if you looked at the graph of growth like this, you would see some fluctuations as well. (No negative growth though, obviously.)
It would be interesting to see. If the Moore’s Law graph really didn’t fluctuate much, then I think you have something in need of explaining.
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Also, you might be wondering something like “if technology has improved drastically, why hasn’t GDP growth shot up to something wild like 7% per year?”. But growth itself requires more and more change every year just to keep at a constant growth percentage, and as Moore’s Law shows, technology itself improves at a mostly exponential rate, so we would only expect the same exponential increase in GDP, not something more-exponential-than-exponential.
Anyway, it seemed to me that if you calculated GDP change over 10-year periods in order to drown out year-to-year fluctuations and business cycles, that you’d have essentially constant 3.5% annualized change except for the 1930s and 1940s. The absence of long-term trends is what confuses me.
http://www.greatplay.net/offsite/us-econ-growth.png
When you look at a graph of the growth rate itself, the data doesn’t look like a perfect fit for a line anymore.
Instead, I think the 3.5% is an average that looks good when you have a graph that is rather zoomed out, but overall isn’t that much of some sort of pattern that needs explaining.
Instead, the economy seems to fluctuate and cycle a lot, and we already have some theories of business cycles to explain why that is so.
You can also see points in history where certain geopolitical events caused lower or higher than average growth, so the idea that the GDP is seemingly immune to geopolitical events is hardly there in actuality.
~
I can’t explain Moore’s Law (that’s an area I haven’t studied at all), but I’d be willing to wager that if you looked at the graph of growth like this, you would see some fluctuations as well. (No negative growth though, obviously.)
It would be interesting to see. If the Moore’s Law graph really didn’t fluctuate much, then I think you have something in need of explaining.
~
Also, you might be wondering something like “if technology has improved drastically, why hasn’t GDP growth shot up to something wild like 7% per year?”. But growth itself requires more and more change every year just to keep at a constant growth percentage, and as Moore’s Law shows, technology itself improves at a mostly exponential rate, so we would only expect the same exponential increase in GDP, not something more-exponential-than-exponential.
Hey, what happened to your graph?
Anyway, it seemed to me that if you calculated GDP change over 10-year periods in order to drown out year-to-year fluctuations and business cycles, that you’d have essentially constant 3.5% annualized change except for the 1930s and 1940s. The absence of long-term trends is what confuses me.