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Are Ideas Getting Harder to Find?

Nicholas Bloom (), Charles Jones (), John van Reenen () and Michael Webb

No 23782, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore's Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas — and in particular the exponential growth they imply — are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity.

JEL-codes: O3 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe
Date: 2017-09
Note: EFG PR
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Working Paper: Are Ideas Getting Harder to Find? (2017) Downloads
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