Some inventions are more important than others.” This is the most important point made by Robert Gordon of Northwestern University in his masterpiece, The Rise and Fall of American Growth . This book provides a deep analysis of the transformation of US economic life between 1870 and 1970 and the subsequent slowdown. Growth is neither inevitable nor steady. Ours is an age of disappointing growth because the technological breakthroughs are relatively narrow.

Deirdre McCloskey, a distinguished economic historian, insists that such “pessimism has consistently been a poor guide to the modern world. We are gigantically richer in body and spirit than we were two centuries ago.” She is right. But, Professor Gordon responds, we have not become richer at a constant rate. On the contrary, growth has been faster at some times than at others, even since the industrial revolution.

Thus, the period after 1890 shows consistent increases in output per person and per hour. But the period between 1920 and 1970 was more dynamic than those before and after: over half a century, output per hour rose at close to 3 per cent a year. A better measure of innovation is the rise in “total factor productivity”: the growth of output, less the contributions of extra inputs of labour and capital. The pattern here is still more striking. The US economy experienced two periods of fast innovation: in 1920-1970 and, at a far slower pace, in 1994-2004. (See charts.)