Re: poly: Modeling Economic Singularities

From: Robin Hanson <>
Date: Thu Apr 02 1998 - 12:26:03 PST

A week ago, Perry wrote:
>> The function A(s) desribes productivity. Change it and productivity
>> changes.
>s is just savings, correct?
>I find the notion that the growth rate of invested capital is purely a
>factor of the savings rate a bit odd.

As with any model, it's fine if A depends on things other than s, as
long as those other things aren't in the model. The claim with
any simple model like this is that the parameters depend on each other
mainly via the dependencies described.

>I also don't understand *how* you account for productivity in "A(s)".

There are different meanings of "productivity". If you mean the relative
marginal products of different forms of capital, then my model doesn't
discuss it because my model aggregates across all kinds of capital.
If you just mean the total product per person, then A(s) is close, because
it describes the rate at which capital produces more capital.

>> I am drawing on a larger literature and summarizing it for this audience.
>> I'd need a much longer presentation to justify everything to your
>> satisfaction.
>I have no objections to one being posted.

They have been posted. They are called "textbooks". I cited one.

>As I said, the Club of Rome equations seemed eminently reasonable to
>me. They also seemed eminently reasonable to a lot of well educated
>people, including economists. "Limits to Growth" was a blockbuster
>report when it came out. The fact that it now seems to be wrong
>doesn't change the fact that it seemed very clearly right at the time.

I'm willing to bet large sums that it did *not* seem reasonable to most
growth economists at the time.

Robin Hanson
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Thu Apr 2 20:32:35 1998

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