The economics of life expectancy improvements Today a post I wrote is being hosted over at ANZ. It’s all about this chart of life expectancy improvements. Source MaxRoser.com Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on Reddit (Opens in new window) Related Published by thomasthethinkengine Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia. View all posts by thomasthethinkengine
2 thoughts on “The economics of life expectancy improvements”
Hi Jason. In this post you state: “One of the best models of long-run growth assumes economic output depends on only three things: capital, labour and technology. Technology is the most important of these in the long run.”
I think the drivers of growth are better described as “capital, labour and obsolescence” – Obsolescence is split between functional obsolescence and fashionable obsolescence. Functional obsolescence includes things that simply wear out as well as loose function due to new technology, (which you cite). But in the age of consumerism, how many functionally operable things are discarded simply because they are no longer fashionable? Consider clothes, foods, (Quinoa anyone???) music, media.
Thanks CP. I’m referring to a long-run growth model called the Solow-Swann model which is a wholly supply side model of the economy. (i.e. all growth depends on how much we can provide). What counts as technology in that model is “recipes/blueprints.” That’s things like business processes, ways of making machines, ways of using machines, and anything that allows us to turn effort and inputs into consumer satisfaction more efficiently.
What you’re describing is more on the demand side and can influence growth in two ways. If we throw away perfectly good things it makes us want to buy new things, which should lift aggregate demand and ensure the economy is performing at potential in the short run. And such demand might also spur further technological innovationin terms of creating desirable end products, by showing that innovation is profitable.