Understanding how and why economies prosper, stagnate, or wither is a question of first-order importance, but our knowledge about the process of economic growth is surprisingly thin. Despite the preponderance of theories of economic growth, the debate is far from settled. Indeed, if growth was well understood as a scholarly matter, policies based on theory and empirics would have produced convergence in levels of economic development across countries, rather than divergence.
The inaugural conference of the Working Group on the Foundations of Long-Run Prosperity, held on June 2-3, 2022, was the first of a series of conferences that will convene to deepen our understanding of the mechanics of long-run economic growth. The meeting allowed a diverse pool of researchers - hailing from the fields of archeology, biology, classics, economics, history, law, and political science - to evaluate socially useful research that leverages recent advances in several fields of scholarship, and to analyze the implications that may be drawn from those research results for academic and policy-focused audiences.
As the meeting was the initiative’s foundational conference, co-chairs Research Fellow Alexander Galetovic and Senior Fellows Amit Seru and Stephen Haber structured the program to explore a broad range of the drivers of economic prosperity. The featured topics were diverse, including questions regarding demographic trends’ potential impact on GDP growth, the development of financial markets in early modern China, and the role of the formation the engineering profession in spurring innovation. Regarding the multi-disciplinary approach to the conference, Hoover Institution Director of Research Daniel Kessler commented that “the wide range of disciplines at the conference led to broad-ranging and open-minded discussions on topics that tend to get siloed within a single field, such as economics or political science. This conference showcased the merits of a multi-disciplinary approach." Future conferences may explore more focused questions, such as the heterogeneity of economic development within countries, the importance of investments in human capital vs. the formation of stable political institutions, and the tension between worldwide pushes for economic development and a changing climate.
In her remarks on June 3rd, Hoover Institution Director Condoleezza Rice noted the importance of studying the mechanisms of long-term growth for governance. "In the fast-paced world of policymaking, thinking about the long-term impacts is something of a breakthrough. Yet, the stakes couldn't be higher, as decisions that are taken at a certain point in time often have long-term consequences. Thinking about the long-run ramifications of historic decisions can help policymakers make sound future ones.” She also lauded the working group co-chairs for pursuing a research question that is at the heart of the Hoover Institution's mission, noting “there is no bigger issue than prosperity, which drives everything else.”
For more information on the research discussed at the conference, please see the Foundations of Long-Run Prosperity conference summary and working paper series.