Published on 3 May 2016
More Solow Model from MRU’s Macro course: the power of ideas in driving economic growth.
A deeper dive into what helps spur the creation of ideas.
According to our previous videos in this section, the Solow model seems to predict that we’ll always end up in a steady state with no economic growth.
But, the Solow model still has one variable unaccounted for: ideas.
So, can ideas keep us growing?
Ideas do one thing really well: they give us more bang for our buck.
This means we get more output for the same inputs of capital and labor. Ideas are a way of upping our productivity, increasing output per worker across different industries.
Just how much extra output are we talking about?
Well, imagine changing the A variable of the Solow model from 1 to 2. This means a doubling of our productivity.
This shifts the entire output curve upward. When output doubles, so does investment. Once investment comes in faster than depreciation, we end up accumulating capital once again.Thus, the economy keeps growing, which further boosts output.
Now, think of what would happen, if ideas continually improved. With each improvement, ideas would keep shifting the output curve upward, which will continually increase investment as well, and allow us to keep to the left of the steady state.
And when we stay to the left, that means we keep growing.
What all this means is, growth at the cutting edge is determined by two things.
First, it’s determined by how fast new ideas are formed, and second, by how much those ideas increase productivity.
You now have a complete picture of our simple Solow model. It’s a model that accounts for catching up growth, due to capital accumulation, and cutting edge growth, due to the buildup of ideas.
Now, since ideas foster growth at the cutting edge, we’re left with the question that naturally follows: what factors help spur the accumulation of ideas?
That’s what we’ll discuss in the next video, so hang tight!
July 18, 2017
The Solow Model and Ideas
July 15, 2017
Office Hours: The Solow Model: Investments vs. Ideas
Published on 7 Jun 2016
Ideas are a major factor in economic growth. But so are saving and investing. If you were given the choice between living in an inventive (more ideas) or a thrifty (more savings) country, which would you choose?
The Solow model of economic growth, which we recently covered in Principles of Macroeconomics, can help you make the choice. In this Office Hours video, Mary Clare Peate will use our simplified version of the Solow model to show you an easy way to work out each country’s economic prospects, and then compare them to see where you’d rather be.
July 13, 2017
“Each month in the United States—a place with about 160 million civilian jobs—1.7 million of them vanish”
Deirdre McCloskey addresses the fear that technological change is gobbling up all the jobs:
Consider the historical record: If the nightmare of technological unemployment were true, it would already have happened, repeatedly and massively. In 1800, four out of five Americans worked on farms. Now one in 50 do, but the advent of mechanical harvesting and hybrid corn did not disemploy the other 78 percent.
In 1910, one out of 20 of the American workforce was on the railways. In the late 1940s, 350,000 manual telephone operators worked for AT&T alone. In the 1950s, elevator operators by the hundreds of thousands lost their jobs to passengers pushing buttons. Typists have vanished from offices. But if blacksmiths unemployed by cars or TV repairmen unemployed by printed circuits never got another job, unemployment would not be 5 percent, or 10 percent in a bad year. It would be 50 percent and climbing.
Each month in the United States — a place with about 160 million civilian jobs — 1.7 million of them vanish. Every 30 days, in a perfectly normal manifestation of creative destruction, over 1 percent of the jobs go the way of the parlor maids of 1910. Not because people quit. The positions are no longer available. The companies go out of business, or get merged or downsized, or just decide the extra salesperson on the floor of the big-box store isn’t worth the costs of employment.
What you hear on the evening news is the monthly net increase or decrease in jobs, with some 200,000 added in a good month. But the gross figure of 1 percent of jobs lost per month is the relevant one for worries about technological unemployment. It’s well over 10 percent per year at simple interest. In just a few years at such rates — if disemployment were truly permanent — a third of the labor force would be standing on street corners, and the fraction still would be rising. In 2000, well over 100,000 people were employed by video stores, yet our street corners are not filled with former video store clerks asking for loose change.
We could “save people’s jobs” by stopping all innovation. You would do next year exactly what you did this year. Capital as well as labor would perpetually be employed the same way. But then we would perpetually have the same income. That’s nice if you’re doing well now. It’s not so nice if you’re poor or young.
Job protections for the old have in fact already created a dangerous class of unemployed youths in the world — 50 percent among Greeks and black South Africans, for instance.
July 10, 2017
A Canadian Cold War innovation – “floppy” magnets as submarine detection tools
Steve Weintz on an experimental Canadian submarine detection device that was simple, effective, and too difficult to train with:
Desperate planners sought ways of making Soviet subs easier to hunt. Any technology that could speed up an undersea search was worth considering. “A submarine’s best defense is of course stealth, remaining quiet and undetected in the ocean deep,” Ballantyne notes. “Something that could rob the Soviets of that cloak of silence must have seemed irresistible and, at least initially, a stroke of genius.”
A Canadian scientist figured some kind of sticky undersea noisemaker would make a Soviet sub more detectable. He designed a simple hinged cluster of magnets that could attach to a submarine’s metal hull.
Movement would cause the flopping magnets to bang against the hull like a loose screen door, giving away the sub’s location to anyone listening. The simple devices would take time and effort to remove, thus also impairing the Soviet undersea fleet’s readiness.
At least that was the idea.
HMS Auriga against the New York City skyline in 1963. U.S. Navy photo.
In late 1962, the British Admiralty dispatched the A-class diesel submarine HMS Auriga to Nova Scotia for joint anti-submarine training with the Canadian navy. The British were helping Canada establish a submarine force, so Royal Navy subs routinely exercised with Canadian vessels.
Auriga had just returned to the submarine base at Faslane, Scotland after a combat patrol as part of the Cuban Missile Crisis. Other subs of the joint Canadian-British Submarine Squadron Six at Halifax had seen action during the crisis.
Did the device work? All too well:
As Auriga surfaced at the end of the exercise, the magnets made their way into holes and slots in the sub’s outer hull designed to let water flow. “They basically slid down the hull,” Ballantyne says of the magnets, “and remained firmly fixed inside the casing, on top of the ballast tanks, in various nooks and crannies.”
The floppy-magnets couldn’t be removed at sea. In fact, they couldn’t be removed at all until the submarine dry-docked back in Halifax weeks later.
In the meantime, one of Her Majesty’s submarines was about as stealthy as a mariachi band. No fighting, no training, no nothing until all those floppy little magnets were dug out of her skin at a cost of time, money and frustration.
The magnets worked on the Soviets with the same maddening results. The crews of several Foxtrots were driven bonkers by the noise and returned to port rather than complete their cruises.
July 9, 2017
Getting closer to science fiction technology every day
In Lois McMaster Bujold’s Vorkosigan Saga novels, one of the imagined technological innovations to play a key part in the story is the Uterine Replicator (spoiler: it’s used to save the life of a premature baby, who grows up — in a manner of speaking — to be the main protagonist of the saga). In Reason, Katherine Mangu-Ward looks at just how close we are getting to the gee-whiz tech Ms. Bujold invented some thirty years ago for her novels:
In April, researchers announced they had managed to keep several extremely premature lambs alive and growing in artificial wombs. After spending up to four weeks in a clear plastic “extra-uterine device” at the Children’s Hospital of Philadelphia, each sheep transformed from a decidedly undercooked fetal specimen to a much more robust critter with long limbs and a fluffy wool coat, the sort of animal you wouldn’t be terribly alarmed to see plop to the ground in a field on a spring afternoon.
The setup strongly resembles a sous vide cooking apparatus: a tiny, tender lamb floats in a large plastic ziplock, hooked up to tubes and monitors. But a video clip posted by the researchers has the emotional heft of feeling a fetus kick when you put a hand on a pregnant woman’s belly. Visible through the clear plastic, the lamb’s hooves twitch gently as it snuffles its nose and wiggles its ears.
The lambs in the experiment were selected for their developmental similarity to human babies born right on the edge of viability, or about four months premature. Babies born that early are equal parts horrifying and marvelous. Tiny creatures with organs visible through their translucent skin, they’re often called “miracle babies.” But there’s nothing particularly mysterious about those little beings curled up in nests of tubes and wires; they live because of the inspiration and hard work and risk-taking and study and pain of hundreds of people.
There are actually more of these struggling newborns now than there were a decade ago, simply because we’ve gotten so much better at keeping extremely premature babies — born before 24 gestational weeks — alive. Yet in the U.S., one-third of all infant deaths and one-half of all cases of cerebral palsy are still attributed to prematurity. Of the babies born that early who survive, more than 90 percent have severe and lasting health consequences, especially with their lungs, eyes, and intestines.
Previous efforts to improve those numbers have been stymied by difficulties duplicating the functions of the placenta, but the device attached to the “Biobag” looks deceptively simple: a pumpless blue plastic box hooked up to the umbilical cord that oxygenates the blood, removes carbon dioxide, and adds nutrients.
In their paper, published in Nature Communications, the Philadelphia researchers are careful to say that human applications of their work are at least a decade away. Yet these little pink lambs are already taking sledgehammers to some of the most precarious coalitions in American politics.
June 30, 2017
Meet the 89-Year Old Who Built a Train in His Backyard | WIRED
Published on 14 Jun 2017
The future of train transportation might be pneumatic tubes and magnets. Meet the 89-year old entrepreneur who wants to disrupt the railroad with a modern twist on a very old train idea.
May 25, 2017
Words & Numbers: Government Can’t Stop Creative Destruction
Published on 24 May 2017
Technology doesn’t just change things, it utterly destroys things. And that’s just fine. It happens so often that people barely even notice when it does. Think about all the new services that have come to market just over the past few years: Uber, Airbnb, Redbox … the list goes on and on.
But that’s only half the story. In turn, the list of services replaced by these new ones is similarly long: taxis, hotels, Blockbuster, etc. And workers in these industries often lose their jobs in the line of creative destruction. We generally accept this as the price of innovation, but many people try to use the government to stop this by blocking the new services.
Today we’re seeing this with more politically well-connected industries like taxis and hotels. Pressure is put on Uber and Airbnb, respectively, to “protect” the established industries they are upending.
This week, Ant and James talk about why this is always a mistake.
Learn More:
https://fee.org/articles/government-cant-stop-creative-destruction/
May 13, 2017
The Physics of World War 1 Planes feat. The Great War Channel
Published on 29 Apr 2017
May 8, 2017
Spanish Civil War – Lessons NOT Learned – The British, French & US
Published on 28 Mar 2017
The Spanish Civil War (1936-1939) was probably the most significant war between the First and the Second World War. [M]any important lessons were learned and NOT learned by the British, French, US, German, Italian and Soviet Forces.
Military History Visualized provides a series of short narrative and visual presentations like documentaries based on academic literature or sometimes primary sources. Videos are intended as introduction to military history, but also contain a lot of details for history buffs. Since the aim is to keep the episodes short and comprehensive some details are often cut.
May 6, 2017
History of the Royal Navy – Steam, steel and Dreadnoughts (1806-1918)
Published on 1 Mar 2013
Here’s also an older post covering the technological challenges faced by the Royal Navy in the post-Napoleonic era, and some of the reasons for all those “weird” ship designs in the Victorian era.
April 29, 2017
If Walls Could Talk The History of the Home Episode 4: The Kitchen
Published on 2 Feb 2017
April 21, 2017
How do spacesuits work? | James May Q&A | Head Squeeze
Published on 8 Nov 2013
You’ve seen the videos of those astronauts on the International Space Station getting suited and booted in a spacesuit before a spacewalk, but how exactly does the space suit work?
A spacesuit has to protect you from the glaring radiation from the sun as well as keeping you warm from the extreme cold of outer space. As well as that is has to make sure you have enough oxygen and enough movement so you can actually do your job.
It also has to be pressurised to about 4.7PSI. Otherwise the empty vacuum of outer space will make your organs increase to twice their normal size and you will meet a very unpleasant untimely death.
Don’t fancy building your own spacesuit, why not build an elevator into space? http://www.youtube.com/watch?v=annVRxRjj4c&feature=c4-overview-vl&list=PLMrtJn-MOYmeNkbYzXsEluioufGDxuqtO
Martin Archer has all the information you need on when humans will be able to go to Mars http://www.youtube.com/watch?v=fYthxj-bO0I&list=PLMrtJn-MOYme6klSjJXoZfWmNZ6ZthOSA&index=12
April 13, 2017
The Future of Airliners? – Aurora D8
Published on 31 Mar 2017
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Why Are Plane Wings Angled Backwards?:
https://www.youtube.com/watch?v=GXFpLnPpDtY
Why Are The Dreamliner’s Windows So Big?:
https://www.youtube.com/watch?v=7-I20Ru9BwM
April 11, 2017
Vantablack – the discovery that fits everybody’s preferred story line
At Samizdata, Brian Micklethwait attempts to look at the newly announced blackest black ever, Vantablack:
In the event that you have somehow managed to miss this story, you can get some idea of how very black Vantablack is by pondering this image, of a mask, together with the same mask covered in the liquid version of Vantablack. The Vantablacked version of the mask might as well be a flat piece of cardboard for all the 3-D shape detail you are able to discern by looking at it. You’d need to be a bat to make sense of it:
That image is to be found at a British Museum posting entitled Vantablack is the new black. I googled that gag, confident that someone would already have used it as a heading, and so it proved.
[…]
If you are the kind that blames capitalism for causing poverty (instead of praising capitalism for getting rid of poverty, the way I do and you should) then perhaps you will say that Vantablack proves how frivolous capitalism is, making black even blacker when there is still so much misery in the world. If you believe that universities should get more government money (Vantablack emerged from the University of Surrey), well then, you’ll say that Vantablack proves that universities should get more government money. If you are an anti-Trumpist or an anti-Brexiteer, you will regard the Vantablack story as proof that we really are living in uniquely dark times. If you are the kind of commenter here whose reaction to any new-tech fuss we report is that it is a fuss about nothing, or perhaps if you are the sort who wants to make fun of such grumpiness, you will perhaps even now be contriving a comment that includes the words: nothing to see here.
April 6, 2017
Words & Numbers: Taxing Robots Does Not Compute
Published on 5 Apr 2017
This week, Antony and James break down Bill Gates’ recent suggestion that companies that use robots instead of human workers should pay employment taxes in order to fund new welfare programs.
