Dynamist Blog

The Source of Stagnation

"The hardest of all economic problems is what to make next. What's valuable that hasn't been done before? Businesses, and whole economies, can only grow so much by copying or incrementally improving what's already been done. For significant growth to continue, innovators have to come up with new and valuable ideas. Mere invention isn't enough; the novelty has to be something customers want." That's from my new Forbes column. It reports on recent work by economist Ned Phelps--who won the Nobel prize the week after I interviewed him--on why Europe was able to grow rapidly after World War II only to stagnate in recent decades.

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