Robert Lucas famously said:

You can see the computer age everywhere but in the productivity statistics

This quote is often linked with the productivity paradox (https://en.wikipedia.org/wiki/Productivity_paradox), such that we don't see mayor productivity growth from new tech.

But there is something I don't understand. Economic growth is about percentage growth. A graph of GDP looks like an exponential function. So nominally a 5% growth is much much higher when the economy is that of the US than that of Malawi.

So we might not see an acceleration of economic growth, but we at least see continued growth, which allegedly becomes harder and harder as economies develop. This is the idea behind Solow's model, where without an exogenous percentage growth in A, output converges to the steady state.

So I don't really understand the problem. To me, computers are clearly visible in a growing economy. But this seems to be unsatisfactory for Lucas, who wants to see what, a 10% growth rate?

What's wrong in my thinking?

Robert Solow famously said:

You can see the computer age everywhere but in the productivity statistics

This quote is often linked with the productivity paradox (https://en.wikipedia.org/wiki/Productivity_paradox), such that we don't see mayor productivity growth from new tech.

But there is something I don't understand. Economic growth is about percentage growth. A graph of GDP looks like an exponential function. So nominally a 5% growth is much much higher when the economy is that of the US than that of Malawi.

So we might not see an acceleration of economic growth, but we at least see continued growth, which allegedly becomes harder and harder as economies develop. This is the idea behind Solow's model, where without an exogenous percentage growth in A, output converges to the steady state.

So I don't really understand the problem. To me, computers are clearly visible in a growing economy. But this seems to be unsatisfactory for Solow, who wants to see what, a 10% growth rate?

What's wrong in my thinking?

Robert Lucas famously said:

You can see the computer age everywhere but in the productivity statistics

This quote is often linkes with the productivity paradox (https://en.wikipedia.org/wiki/Productivity_paradox), such that we don't see mayor productivity growth from new tech.

But there is something I don't understand. Economic growth is about percentage growth. It's about exponential growth. So nominally a 5% growth is much much higher when the economy is that of the US than that of Malawi.

So we might not see an acceleration of economic growth, but we at least see continued growth, which allegedly becomes harder and harder as economies develop.

So I don't really understand the problem. To me, computers are clearly visible in a growing economy. But this seems to be unsatisfactory for Lucas, who wants to see what, a 10% growth rate?

What's wrong in my thinking?

Robert Lucas famously said:

You can see the computer age everywhere but in the productivity statistics

This quote is often linked with the productivity paradox (https://en.wikipedia.org/wiki/Productivity_paradox), such that we don't see mayor productivity growth from new tech.

But there is something I don't understand. Economic growth is about percentage growth. A graph of GDP looks like an exponential function. So nominally a 5% growth is much much higher when the economy is that of the US than that of Malawi.

So we might not see an acceleration of economic growth, but we at least see continued growth, which allegedly becomes harder and harder as economies develop. This is the idea behind Solow's model, where without an exogenous percentage growth in A, output converges to the steady state.

So I don't really understand the problem. To me, computers are clearly visible in a growing economy. But this seems to be unsatisfactory for Lucas, who wants to see what, a 10% growth rate?

What's wrong in my thinking?