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How does economic growth happen? It’s a hard question to answer but economists have tried for centuries. Perhaps the most famous model came from MIT economist Robert Solow in 1956. The Solow growth model specifies three factors that fuel growth: productivity, capital, and labor.
Productivity through new ideas and technologies (like electricity or the internet) obviously creates economic value. Capital, in the form of buildings or equipment or software, likewise allows workers to be more productive. But it’s labor – people – that is often overlooked as a source of our prosperity. And that brings us to the looming economic
