Just a few weeks ago, the Royal Swedish Academy of Sciences announced the decision to award this year’s Nobel Prize in Economics to Paul Romer for integrating technological change into macroeconomic analysis. That’s a good reason for thinking through the long-term history of innovative activity, for investigating how technological change itself changed over time, and what the future might hold for us.
The risks of economic narrow-mindedness
30 Apr 2018 by 2 Comments
It is all too tempting to judge an economy’s health simply by its growth rate. No big wonder then that many economic policies are devised with growth as their only goal. However, this approach grossly simplifies the complexity of an economy’s inner workings. Rather than searching for the one perfect signal of economic success, we should take the opposite angle and try to understand what could go wrong. Today, I’ll offer a more detailed sketch of this concept to illustrate how our own economic narrow-mindedness makes us susceptible to economic failure, i.e., how a singular focus on growth blinds us for many important aspects of economic health.
How economies fail – More from Jane Jacobs
30 Mar 2018 by 2 Comments
How do you know that an economy is healthy? The standard answer to this seemingly simple question is: It grows! While growth is an important hint at economic success, making it the only indicator would be far too simplistic. But instead of searching for the one perfect signal of economic success, I suggest a comprehensive review of the different ways for an economy to fail: acknowleding what can go wrong in an economy thus becomes the starting point for a more nuanced and realistic picture of economic health. Today, I want to frame such a picture.
The Nature of Economies – What Jane Jacobs tells us about innovation
25 Feb 2018 by Leave a Comment
In ‘The Nature of Economies’, Jane Jacobs provides a view on a number of important aspects that often go unrecognised. Starting from her insights on an economy’s main processes, the control mechanisms at work, and the fitness of an economy, we can take a comprehensive look at innovation targets, i.e., the types of problems our society needs to solve.
What’s an economy – According to Jane Jacobs
17 Jan 2018 by Leave a Comment
Lots has been said and written about the economy and how it works, most if it in the specific terminology of economics. It took somebody with a very broad spectrum of interests, insights and ideas to develop a more natural narrative, somebody like the journalist, author, and activist Jane Jacobs. In “The Nature of Economies”, she offers a conceptual description of economies that is entirely based on the very same natural principles that govern chemistry, mechanics, and biology, and a fresh perspective on how economies thrive or fail. This post is a tribute to her work.
understanding innovation 