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Are Ideas Getting Harder to Find?

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

No 566, 2017 Meeting Papers from Society for Economic Dynamics

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 the research productivity of these people. 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 75 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.

New Economics Papers: this item is included in nep-eff, nep-gro, nep-ino and nep-tid
Date: 2017
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Working Paper: Are Ideas Getting Harder to Find? (2017) Downloads
Working Paper: Are Ideas Getting Harder to Find? (2017) Downloads
Working Paper: Are Ideas Getting Harder to Find? (2017) Downloads
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