• DOI:10.4324/9781315197715-3
• Corpus ID: 11439596

Is growth obsolete

@inproceedings{Nordhaus1973IsGO,
  title={Is growth obsolete},
  author={William Nordhaus and James Tobin},
  year={1973}
}

• W. Nordhaus, J. Tobin
• Published 1973
• Economics

A long decade ago economic growth was the reigning fashion of political economy. It was simultaneously the hottest subject of economic theory and research, a slogan eagerly claimed by politicians of all stripes, and a serious objective of the policies of governments. The climate of opinion has changed dramatically. Disillusioned critics indict both economic science and economic policy for blind obeisance to aggregate material "progress," and for neglect of its costly side effects. Growth, it is charged, distorts national priorities, worsens the distribution of income, and irreparably damages the environment. Paul Erlich speaks for a multitude when he says, "We must acquire a life style which has as its goal maximum freedom and happiness for the individual, not a maximum Gross National Product." Growth was in an important sense a discovery of economics after the Second World War. Of course economic development has always been the grand theme of historically minded scholars of large mind and bold concept, notably Marx, Schumpeter, Kuznets. But the mainstream of economic analysis was not comfortable with phenomena of change and progress. The stationary state was the long-run equilibrium of classical and neoclassical theory, and comparison of alternative static equilibriums was the most powerful theoretical tool. Technological change and population increase were most readily accommodated as one-time exogenous shocks; comparative static analysis could be used to tell how they altered the equilibrium of the system. The obvious fact that these "shocks" were occurring continuously, never allowing the