Stagnation and Beyond: Economic Growth and the Cost of Knowledge in a Complex World

61 Pages Posted: 31 Jul 2019 Last revised: 4 Aug 2019

Date Written: August 2, 2019

Abstract

What economists have identified as stagnation over the last few decades can also be interpreted as the cost of continuing successful engagement with a complex world that is not set up to serve human interests. Two arguments: 1) The core argument holds that elasticity (ß) in the production function for economic growth is best interpreted as a function of the interaction between the economic entity (firm, industry, the economy as a whole) and particular aspects the larger world: physical scale in the case of semi-conductor development, biological organization in the case of drug discovery. 2) A larger argument interprets current stagnation as the shoulder of a growth curve in the evolution of culture through a succession of fundamental stages in underlying cognitive architecture. New stages develop over old through a process of reflective abstraction (Piaget) in which the mechanisms of earlier stages become objects for manipulation and deployment for the emerging stage.

Keywords: growth, secular stagnation, stagnation, cultural evolution, emergence, ideas

Suggested Citation

Benzon, William L., Stagnation and Beyond: Economic Growth and the Cost of Knowledge in a Complex World (August 2, 2019). Available at SSRN: https://ssrn.com/abstract=3426761 or http://dx.doi.org/10.2139/ssrn.3426761

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