[dash2]

It would be a change to macro models of economic growth, if accepted. The default is that TFP grows exponentially. There's also a useful comment by Marginal Revolution here (https://marginalrevolution.com/marginalrevolution/2022/04/ad...) where he points out that TFP itself is really just a residual, and perhaps not a very well-defined concept. That is, if you regress

Y = AK^beta L^(1-beta)

with K being the amount of capital and L the amount of labour, A is just the unexplained "scaling factor" and it gets called TFP. But what TFP actually is... is a bit of a whatever-you-like.

[pishpash]

Why is TFP assumed exponential by default? What's the theory behind that? A time lag in the transfer between exponential input growth (e.g. population) and exponential output growth?

[dash2]

No. The inputs are labour and capital, so that's already taken care of.

One answer might be "TFP reflects technical knowledge; the more knowledge there is, the easier it is to generate new knowledge". But you'd have to get into growth macro for the details. Indeed, Romer is the person.

[jasoncrawford]

It's not always assumed to be exponential. It was assumed exponential by Paul Romer because long-term economic growth is pretty exponential. Much subsequent work has followed that model, but not all of it.

[pishpash]

But TFP is not output. Exponential output growth can come directly from exponential input growth, which would be a trivial obvervation.

[marcosdumay]

> long-term economic growth is pretty exponential

Yeah, that graph with the largest time scale on the article strongly disagrees.