Tuesday, February 15, 2011
Brooks on the Great Stagnation
Stagnation is what occurs when all the low-hanging fruit of economic development has been picked. David Brooks gives a pithy account of Tyler Cowen's Great Stagnation. In the Irish case, we had two decades of huge improvement in childhood conditions in the 1940s and 1950s, which were low-hanging fruit to some extent, and two decades of substantial increases in the educational attainment at secondary school level following that. We also had rapid infrastructural improvement and increases in college attendance throughout the 1990s, combined with many tax advantages to encourage investment in Ireland. We probably had the equivalent of Cowen's Great Stagnation by the beginning of the century. Our solution to arresting the decline, unfortunately, turned out a little pear-shaped.