Summary
Rich countries largely solved the problem of supplying their citizens with necessities, but that astonishing achievement has been succeeded by slow growth, a concentration of economic activity among people and places, a substantial shift to what seem to be low productivity services, and a rapid technological innovation that does not seem to translate to higher living standards. This book examines how fundamental changes in consumer demand - mainly a drop in sensitivity to prices - caused this prosperity problem, and how that has reshaped the logic of economic growth and the incentives facing firms and industries. It shows how these rich economies now have to rely on building the scale of their markets, not technology per se, to make progress on both material living standards and other issues facing them. The policies that promote this progress cannot be lifted from the experience of the past, but have to adapt to the changes in consumer demand that occurred when the rich world got rich.
Available in 2027 from the University of Chicago Press.
Chapter Notes
The book relies on text and figures to tell the story of the prosperity problem. Behind the scenes is some economic theory and more empirical work to produce those figures. Both are explained in a set of chapter notes that got a little long for an actual printed book, but which you can access here in full. The material is still organized by chapter, but as the material builds on itself you'll find references in one chapter's notes to prior ones.
Data and Code
Everything in the book can be replicated using the code and data in the Github repository for this project. There is nothing super technical about that - you can easily download everything in a convenient zip file to use on your own computer. The advantage of Github is that the link will always point to the latest version of my code if I fix anything.
Most of the data used in the book is publicly available, and the snapshots of those sources that I used are available in the repository. The one exception is firm-level data from Compustat. The repository provides instructions on accessing that data through the Wharton Research Data Service, which is often available through a university or industry license.