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Long-Term Growth As A
Sequence of Exponential Modes
Robin Hanson *
Department of Economics
George Mason University†
December, 2000
First Version September 1998
Abstract
A world product time series covering two million years is well fit by either a sum of four
exponentials, or a constant elasticity of substitution (CES) combination of three exponential
growth modes: “hunting,” “farming,” and “industry.” The CES parameters suggest that farming
substituted for hunting, while industry complemented farming, making the industrial revolution
a smoother transition. Each mode grew world product by a factor of a few hundred, and grew
a hundred times faster than its predecessor. This weakly suggests that within the next century
a new mode might appear with a doubling time measured in days, not years.
JEL Categories: O00, N10
Keywords: Long World Growth Industrial Revolution
*For their comments, I thank Curt Adams, Bryan Caplan, Joel Cohen, Roger Congleton, Tyler Cowen, Mark Crain,
Eirikur Hallgrimsson, Carl Feynman, Hal Finney, Brad De Long, Perrin Meyer, Carlos Ramirez, John Schroeter,
Didier Sornette, Hal Varian, and participants of the GMU economics Brown Bag talk series and the SEA 2000
Annual Meeting.
†[email protected] http://hanson.gmu.edu 704-993-2326 FAX: 704-993-2323 MSN 1D3, Carow Hall, Fairfax VA
22030
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Introduction
Many have argued that current U.S. stock prices are much higher than can be justified by reasonable
profit forecasts based on empirical models derived from the recorded history of the U.S. economy
(Shiller, 2000). While it might be theoretically possible for the economy to suddenly switch to a
fundamentally new mod ...