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Showing posts from March, 2024

Why growth is falling in all developed countries (as a long term trend)

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In this post I argue that economic growth is not the normal state of affairs, it is a blip caused by the discovery of a one-off resource of non-renewable energy.   The logistic equation \frac{dy}{dt} = y(1-y) Here's a simple model.  Humans discover an exploitable but limited resource and start consuming it.  The amount consumed, y(t), is a function of time.  The general form of the equation is \frac{dy}{dt} = \alpha y (\beta - y), but if you choose the right units \alpha and \beta both become 1. Why should this work, in principle? Early on, the factor 1-y is approximately 1 and can be ignored.  So the model states that annual consumption dy/dt starts off proportional to y.  In other words, y grows exponentially at first.  This could happen if exploiting the resource enables further exploitation of the resource.  For example, suppose a few humans are shipwrecked on an island with 1000 trees: they take ages to cut down the ...