Ok, this is a counterargument I want to make sure I understand.
Is the following a good representation of what you believe?
When you divide GDP by a commodity price, when the commodity has a nearly-fixed supply (like gold or land) we’d expect the price of the commodity to go up over time in a society that’s getting richer—in other words, if you have better tech and better and more abundant goods, but not more gold or land, you’d expect that other goods would become cheaper relative to gold or land. Thus, a GDP/gold or GDP/land value that doesn’t increase over time is totally consistent with a society with increasing “true” wealth, and thus doesn’t indicate stagnation.
Yes. The detailed dynamics depend a lot on the particular commodity, and how elastic we expect demand to be; for example, over the long run I expect GDP/oil to go way up as we move to better substitutes, but over a short period where there aren’t good substitutes it could stay flat.
Ok, this is a counterargument I want to make sure I understand.
Is the following a good representation of what you believe?
Yes. The detailed dynamics depend a lot on the particular commodity, and how elastic we expect demand to be; for example, over the long run I expect GDP/oil to go way up as we move to better substitutes, but over a short period where there aren’t good substitutes it could stay flat.