PREDICTING TECHNOLOGICAL CHANGE (COMMENT). Whether technological progress consists of many small steps or a few big ones has a lot of significance for how you explain economic growth. I posted several times, starting here, on Professor Robert Gordon’s articles asking —because of a possible end to technological change— “Is U.S. Economic Growth Over?†My brother Elmer commented here that Professor Gordon’s division of technological innovation into three waves depends on a lot of judgments in grouping the inventions, and he pointed out some of those judgments. Elmer concluded: “Is there a theory of when invention occurs present here or is this like the predictions around 1900 that no more discoveries could be made in physics?” I agree with Elmer that you need a theory to predict innovations. For myself, I am optimistic about future innovation, partly because the many innovators making changes to improve software or to make an iPod smaller remind of those medieval craftsmen improving wind mills. Professor Gordon argues that the fact that a wave of important inventions led to a period of dramatic US economic growth between 1928 and 1950 does not mean that it will ever happen again. And, of course, we can’t know.
Nevertheless, it is an important warning to optimists like me that some very knowledgeable people think our most important innovations are in the past.