Not a comment on the argumentation or anything, I know we want to be rationalists and worry about the arguments (so thank you for posting about the disagreement that actually offers some analysis), but just registering my initial reaction to the 20%/year in 10 years claim:
Anyone with a cursory understanding of the history of economic growth (I don’t even mean professors who have spent their careers studying growth economics) will know that number is facially ridiculous. My first thought was, great, now I know this person has no idea what they are talking about and can be safely ignored. As a communication device, that prediction failed miserably for me because it did not make me want to assess the underpinnings or energize me to research further about economic growth, which is the least such a tweet should have done if not prompt an update. Though good luck with the latter because, again, if you have an iota of knowledge about the area, your prior distribution for the realm of US economic growth possibilities is correctly more narrow than “let me throw out a shocking round number to myself, see if I can live with it, and then see if others take it seriously.” Am I being too harsh? Well, no, he literally “didn’t put much effort into calibrating the numbers.”
Now back to the regularly scheduled programming of arguing about the merits.
Right, when you go to argue the merits, you ask “well, if there were to be a phase change, what would the phase change look like?” And the original estimate was derived from not much effort in calibrating the numbers, and the reply was that even if we saw an utterly shocking phase change, we’d get nowhere close to 20%. You can do varying degrees of in-depth analyses to get to that point (good on you), or you can do like I did and rely on a semi-informed prior.
Here’s US growth from 1947. Imagine all the things that happened since then that could have induced mild phase changes to the growth trajectory. ASSUMING that there will be a substantial phase change (again, see Cameron Fen’s thread), 20% is still ludicrous. https://fred.stlouisfed.org/graph/?g=TE7B
Not a comment on the argumentation or anything, I know we want to be rationalists and worry about the arguments (so thank you for posting about the disagreement that actually offers some analysis), but just registering my initial reaction to the 20%/year in 10 years claim:
Anyone with a cursory understanding of the history of economic growth (I don’t even mean professors who have spent their careers studying growth economics) will know that number is facially ridiculous. My first thought was, great, now I know this person has no idea what they are talking about and can be safely ignored. As a communication device, that prediction failed miserably for me because it did not make me want to assess the underpinnings or energize me to research further about economic growth, which is the least such a tweet should have done if not prompt an update. Though good luck with the latter because, again, if you have an iota of knowledge about the area, your prior distribution for the realm of US economic growth possibilities is correctly more narrow than “let me throw out a shocking round number to myself, see if I can live with it, and then see if others take it seriously.” Am I being too harsh? Well, no, he literally “didn’t put much effort into calibrating the numbers.”
Now back to the regularly scheduled programming of arguing about the merits.
perhaps it should be rephrased as an argument for a total phase change in economic paradigm, then?
Right, when you go to argue the merits, you ask “well, if there were to be a phase change, what would the phase change look like?” And the original estimate was derived from not much effort in calibrating the numbers, and the reply was that even if we saw an utterly shocking phase change, we’d get nowhere close to 20%. You can do varying degrees of in-depth analyses to get to that point (good on you), or you can do like I did and rely on a semi-informed prior.
Here’s US growth from 1947. Imagine all the things that happened since then that could have induced mild phase changes to the growth trajectory. ASSUMING that there will be a substantial phase change (again, see Cameron Fen’s thread), 20% is still ludicrous.
https://fred.stlouisfed.org/graph/?g=TE7B