Has the American economy exhausted the easy sources of growth?
YOU could be forgiven for missing the publication of the most talked-about economics book of the year so far. The author, Tyler Cowen, an economist at George Mason University, quietly announced its release in a post on his blog. “The Great Stagnation” is an e-book*, and at just 15,000 words, a slim one at that. But it has inspired a raucous discussion in the blogosphere which has spilled over to mainstream media.
The book explores the puzzling stagnation in the typical American wage since the 1970s. The prevailing view has been that soggy median wages can be explained by widening income inequality. But Mr Cowen blames lagging pay on a shortfall in growth itself. Output data have been overstated, he reckons, thanks to rising contributions from hard-to-value industries. Worse, economic engines in the rich world are running ever slower as countries exhaust easy sources of rapid growth. ...
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