What I find most shocking about all this exponential vs linear discussion is how easily it gets us trapped into a [necessarily false] dichotomy. As a mathematician I am surprised that the alternative to an exponential curve be a line (why not a polynomial curve in between?).
Polynomial growth is actually a better fit to some of the non-frontier “economic miracles”, say Japan, South Korea, Taiwan, et cetera. I haven’t fit this myself but Robert Lucas has done some work on this subject and his estimates imply a growth that’s more like ∼t3/2.
For frontier TFP growth I’m not sure if using general polynomials will be more informative, though it’s certainly worth doing if you’re going to write a whole paper on the subject.
What I find most shocking about all this exponential vs linear discussion is how easily it gets us trapped into a [necessarily false] dichotomy. As a mathematician I am surprised that the alternative to an exponential curve be a line (why not a polynomial curve in between?).
Polynomial growth is actually a better fit to some of the non-frontier “economic miracles”, say Japan, South Korea, Taiwan, et cetera. I haven’t fit this myself but Robert Lucas has done some work on this subject and his estimates imply a growth that’s more like ∼t3/2.
For frontier TFP growth I’m not sure if using general polynomials will be more informative, though it’s certainly worth doing if you’re going to write a whole paper on the subject.