Policy Research in Macroeconomics

‘Growth’ as flawed concept, and inherent to case for globalisation

With acknowledgement to Arup. https://www.arup.com/perspectives/energy-from-high-rise-water-supply
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In the latest PRIME publication by Dr. Geoff Tily “On Prosperity, Growth and Finance” the author elaborates on an earlier theme: the development of the economic concept of ‘growth’ in the 1960s by orthodox economists.  Tily points out that growth is not just a relatively recent and post-World War II preoccupation, it must also be understood as “inherent to the case for a globalized system.”

Tily notes that Keynes was concerned with the level of economic activity – output and employment. Before the Second World War “there was no sense of a systematic, and to some extent uniform, rate of change of the level at which an economy operated.” As orthodox economists struggled to build a rival system to Keynes’s, they set the world “a systematic and improbable target: to chase growth.  Nobody seems to have paused to consider whether growth derived as the rate of change of a continuous function was a meaningful or valid way to interpret changes in the size of economies over time” writes Tily.

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