The hottest Growth Theory Substack posts right now

Modern growth theory introduced formal production functions that made economic progress measurable and showed that, in competitive markets, wages tend to reflect workers' marginal product.
Housing research finds house prices move with average incomes while housing supply usually follows population growth, so price–income correlations don’t prove supply restrictions are the primary cause of high local prices.
New solar-driven processes to make synthetic hydrocarbons promise abundant, low‑cost energy in the future, but real‑world limits like grid integration and total system costs could slow their widespread adoption.

For most of the agrarian age, technological progress was extremely slow and often fragile, so living standards stayed low and forward steps could vanish during collapses.
Measuring the stock of technology is hard, but one useful idea is that idea-value grows with output per person plus part of population growth, and true wealth should account for variety and longer lifespans.
From about 1600 onward growth rates rose sharply in stages (commercial, industrial, modern), producing a massive, qualitative gulf between preindustrial poverty and today’s high material abundance.

Getting labor's income share down to near zero is a knife-edge that needs extreme assumptions: either machines must be perfect substitutes for all human tasks, or capital must forever earn returns above depreciation plus what savers require. Without those extreme conditions, capital's share can rise a lot but will still hit a finite steady state.
Whether capital's share rises or goes to infinity depends on supply and demand for capital: easier substitution flattens demand and raises capital's share, but faster technological progress also increases obsolescence and depreciation, which raises the hurdle savers need and can stop unbounded accumulation. These opposing forces determine if capital simply grows a lot or truly outstrips labor forever.
A global progressive tax on capital may backfire: if capital is mobile and supply is elastic, owners can avoid the tax and its burden falls on wages, shrinking output; even coordinated taxes can't force savers to invest if after-tax returns fall below their patience threshold.

Production relies on complementary tasks, so a few high-quality workers can boost output far more than many low-quality workers; quality isn’t a simple substitute for quantity, which leads skilled workers to cluster and earn much more.
Intermediate goods create powerful multiplier effects across the economy—better inputs like electricity or transport raise productivity everywhere—but when these inputs are complements, the weakest link can cap overall output and help explain big rich–poor gaps.
AI’s growth impact hinges on whether it substitutes for or complements other inputs; if many tasks remain hard to automate and are complementary, they become weak links that limit explosive growth and prevent the capital share from soaring to 100%.

Economic growth means people's living standards and productivity improve over time. It's not just about having more money, but also how everyone shares those resources fairly.
Before 1870, most economic progress was slow, and many people lived in poverty. After that, societies began to develop better ways of organizing and sharing wealth, leading to real improvements for many.
Today, we face challenges like climate change and inequality that threaten our progress. We need to find new ways to support everyone and ensure that future generations can thrive.

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