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In 100 Years

In 100 Years: Leading Economists Predict the Future

edited by Ignacio Palacios-Huerta
Copyright Date: 2013
Published by: MIT Press
Pages: 216
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  • Book Info
    In 100 Years
    Book Description:

    This pithy and engaging volume shows that economists may be better equipped to predict the future than science fiction writers. Economists' ideas, based on both theory and practice, reflect their knowledge of the laws of human interactions as well as years of experimentation and reflection. Although perhaps not as screenplay-ready as a work of fiction, these economists' predictions are ready for their close-ups. In this book, ten prominent economists -- including Nobel laureates and several likely laureates -- offer their ideas about the world of the twenty-second century. In scenarios that range from the optimistic to the guardedly gloomy, these thinkers consider such topics as the transformation of work and wages, the continuing increase in inequality, the economic rise of China and India, the endlessly repeating cycle of crisis and (projected) recovery, the benefits of technology, the economic consequences of political extremism, and the long-range effects of climate change. For example, Daron Acemoglu offers a thoughtful discussion of how trends of the last century -- including uneven growth, technological integration, and resource scarcity -- might translate into the next; 2013 Nobelist Robert Shiller provides an innovative view of future risk management methods using information technology; 2012 Nobelist Alvin Roth projects his theory of Matching Markets into the next century, focusing on schools, jobs, marriage and family, and medicine; 1987 Nobelist Robert Solow considers the shift away from remunerated labor, among other subjects; and Martin Weitzman raises the intriguing but alarming possibility of using geoengineering techniques to mitigate the nevitable effects of climate change. In a 1930 essay mentioned by several contributors, "Economic Possibilities for Our Grandchildren," John Maynard Keynes offered predictions that, read today, range from absolutely correct to spectacularly wrong. This book follows in Keynes's path, hoping, perhaps, to better his average.

    eISBN: 978-0-262-32008-5
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-x)
  4. The Idea for In 100 Years
    (pp. xi-xiv)
    Ignacio Palacios-Huerta

    InAn Enquiry Concerning Human Understanding,published in 1748, the Scottish philosopher David Hume reduced the principles of associative memory—in which each idea is linked to many others in a network—down to three: resemblance, contiguity in time and place, and causality. I do not remember exactly how the idea for this book appeared in my mind, but Hume’s principles provide good guidance. I have three suspects. The first are my twin children. When they were born eight and a half years ago, I started thinking about the future with much greater care and intensity than before. Before their...

  5. 1 The World Our Grandchildren Will Inherit
    (pp. 1-36)
    Daron Acemoglu

    I write as I await the birth of my second son. If trends about fatherhood continue as they have over the past several decades, the chances are that he will have children in his forties, and (some of) my grandchildren will be in their forties or fifties in the year 2113. What sort of world will they inhabit? The track record of forecasts in social sciences does not inspire much confidence in our ability to predict events in the next 100 years. But prediction about the future is often a vehicle for clarifying the challenges ahead, and because it partly...

  6. 2 Through the Darkness to a Brighter Future
    (pp. 37-48)
    Angus Deaton

    When Keynes wrote his famous essay, “Economic Possibilities for Our Grandchildren,” times were tough and a dim future loomed. But Keynes warned his readers not to confuse the short run with the long run and reassured them that the long-term fundamentals were sound. The technical progress that had brought the world so far could be relied on to take it a great deal further. He worried that there were circumstances that could derail progress, and he made his predictions conditional on there being “no important wars and no important increases in population.” World War II and the population explosion surely...

  7. 3 The Cone of Uncertainty of the Twenty-First Century’s Economic Hurricane
    (pp. 49-56)
    Avinash K. Dixit

    Brilliant minds, including Niels Bohr and Yogi Berra, are supposed to have declared that prediction is very difficult, especially about the future. And I can safely predict that several contributors to this book will invoke that dictum. Then why are we doing it?

    Speaking for myself, I have a mixture of motives. First, following in Keynes’s footsteps and in the company of such distinguished fellow contributors is irresistible. Second, I will not be around to be ridiculed when my predictions go spectacularly wrong. Weather forecasters and prognosticators of financial markets have thicker skins; they blithely make new predictions every day...

  8. 4 Wealth and the Self-Protection Society
    (pp. 57-84)
    Edward L. Glaeser

    A century can seem like an enormously long time, but the contours of current America were in place 100 years ago. Per capita income in the United States was around $8,800 in 2012 dollars, about one-sixth of the current level. Cars, telephones, radios, and movies were new, but they were proliferating rapidly. The number of automobiles in the United States had increased tenfold from 1907 to 1913. The election of 1912 was a watershed, where the two most popular candidates had both embraced a vision of a far more active federal government, foreshadowing the changes that would occur after the...

  9. 5 Keynes, His Grandchildren, and Ours
    (pp. 85-98)
    Andreu Mas-Colell

    In 1930 John Maynard Keynes delivered a lecture entitled “Economic Possibilities for Our Grandchildren” at the Residencia de Estudiantes in Madrid. It was not a very characteristic piece for Keynes, whose better-known observation about the long term is that we will all be dead. Yet in the Residencia de Estudiantes, he put aside this extreme form of realism and spread the wings of imagination. His lecture caused “surprise, if not astonishment” to an audience that expected to hear his views on the economy of 1930.¹ That was not what they got. In a world in the first year of an...

  10. 6 American Politics and Global Progress in the Twenty-First Century
    (pp. 99-108)
    John E. Roemer

    As an American, I naturally tend to focus on how developments in my country will affect the world during the next century. At this time, I believe that the most important unknown is politics, not economics. In particular, since the defeat of the Republican Party in the 2008 presidential election and the advent of the first black American president, we have seen the Republican Party move sharply to the right, contrary to what one would have expected a conservative party to do after a defeat by a party to its left. The policies advocated by the Republican Party today, if...

  11. 7 In 100 Years
    (pp. 109-120)
    Alvin E. Roth

    For those of you reading this chapter in 2113, let me introduce myself by saying that in the late twentieth and and early twenty-first centuries, I studied the design of matching markets: those in which price alone does not clear the market and so participants cannot just choose what they want (even if they can afford it); they also have to be chosen. These are markets that involve application or selection processes or other forms of courtship. Matching markets determine some of the most important events of our lives: where we go to school, whom we marry, what jobs we...

  12. 8 The Risks of the Next Century and Their Management
    (pp. 121-136)
    Robert J. Shiller

    The next century carries with it any number of risks as an unprecedented number of people attempt to live well on a planet with limited and endangered resources, with ever more dangerous strategic weapons of mass destruction, and with the flourishing of new information technologies that stir up labor markets and create career risks. Much of the management of these risks will be in the domain of science and engineering, but there is also the purely financial and insurance domain, and the subject of this chapter. There is an expectation that with the help of new technology, new and far...

  13. 9 Stray Thoughts on How It Might Go
    (pp. 137-144)
    Robert M. Solow

    One hundred years is a very long time, perhaps not on the evolutionary timescale, but certainly on the economic. The conventional estimate of real national income per person in the United States in 1910 puts it at 19.2 percent of its value in 2010. That represents an average annual growth rate of 1.66 percent. There were no national accounts in 1910, so the number itself is doubtful. Besides, it is not clear how to translate that numerical abstraction into a comparison of lived experience or “standard of living.”

    We have a feeling for the 2010 figure of $43,000 per person....

  14. 10 The Geoengineered Planet
    (pp. 145-164)
    Martin L. Weitzman

    If there is one genuinely natural bridge spanning the chasm between now and a century from now, I think it is climate change. We who are here now can envision only the foundation of this bridge, and we see this foundation but through a glass darkly. Even so, we can make out enough features to sense that something big and possibly ominous might be in the making on the distant horizon.

    In this chapter, I speculate on the subject of the future of climate change. In particular, I focus on the nexus between humanity and nature as viewed through the...

  15. Contributors
    (pp. 165-166)
  16. Notes
    (pp. 167-178)
  17. Index
    (pp. 179-196)