Why Do Economies Stop Growing?

Michael Spence gives some answers to that question.  He describes some of the persistent problems in developing countries, and he turns his attention to advanced economies.  He perceives three general factors that affect growth in advanced economies.  The first factor is a scarcity of tangible and intangible resources. That problem is exacerbated by our failure to measure important intangibles such as social cohesion.  A second factor might be called political dysfunction.  Problems that are difficult to solve, such as inequality, are a breeding ground for poor policy responses.  Lastly, he discusses policies that might be used to moderate business cycles.  He makes a case for the prudent use of fiscal policy but structural problems must also be addressed as the composition of output changes in an economy.