October 3, 2008
Is Ignorant Dogmatism Possible? I'm Afraid So.
October 3, 2008
The Lamps Are Going Out
October 3, 2008
What If the Median Voter Were a Failing Student?
October 3, 2008
Credit Default Swaps
October 3, 2008
How Government Used Fannie and Freddie
October 2, 2008
The International Angle
October 2, 2008
Cochrane and Rogoff on the PBS News Hour
October 2, 2008
Henry Waxman's Hearings
October 2, 2008
Economists' Bipartisan Bailout Opposition


I don't even understand the question!
I have my own question: complexity may make the economy more robust, but does it also make the economy grow more slowly?
I'm of course thinking of economies of scale here. Yes, complexity means more choices, but it also means more work to supply those choices, and no one choice can achive the economies of scale that we previously had for our fewer choices.
In the 1950's, Ford and Chevy each produced one basic car. They each produced over a million of this one model per year, and could really optimize the production of that one model to achieve enormous economies of scale.
These days, the number of car models, and car manufacturers for that matter, has exploded. The choice is dizzying. Some of those models are lucky to break into 5 figures for production. What impact does this have over the overall economy if economies of scale are lost?
This is probably an even bigger issue in services, where it is very difficult to build any economies of scale, and therefore it is difficult to build productivity. If productivity is the engine of economic growth, what does this complexity do to our economic growth rate?