Note: This post was written quite quickly and I'm not well versed in this subject matter.
Thomas' paper here and Dylan Matthews' excellent write-up on it here.
I would love to spark some discussion on this: total factor productivity growth being linear in many developed countries, not exponential, could potentially be very scary.
Of course, as Dylan mentioned, TFP has issues. I believe the main critique is that, due to its simplicity, it can sometimes remain the same even after changes in technology and productivity.
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I think TFP should have a constant upper bound due to physical limits, but maybe we're unlikely to get anywhere near it in practice; I wouldn't know.
Separately, capital and labour growth are limited by exploring and exploiting space at a cubic rate, bounded by the speed of light in all directions.
So, growth is bounded above by a cubic function, assuming our current understanding of physics.
Good point! Though I think it shouldn't be difficult to figure out a lower upper bound, maybe an economist is working on that right now, depending on how actively researched this domain is.
There's an excellent critique of that paper on LW: https://www.lesswrong.com/posts/yWCszqSCzoWTZCacN/report-likelihood-ratios
The conclusion is that exponentials look better for longer-run trends, if you do fair comparisons. And that linear being a better fit than exponentials in recent data is more about the error-model than the growth-model, so it shouldn't be a big update against exponential growth.
Great post! I was mainly concerned with the p-values heading haha. I wonder if Thomas Philippon will follow up on all of the attention his paper received.
Good point! Though I think it shouldn't be difficult to figure out a lower upper bound, maybe an economist is working on that right now, depending on how actively researched this domain is.