The role of expectations is not limited to monetary policy but is crucial in many areas of economics, as Bob showed in his later research on investme… - Robert Barro

Things would have worked out a lot better if we had bought our first television set a year earlier, in 1950, so that I could have watched DiMaggio while he was still great. Then I could have shared with my father and other people the vision of the eternal baseball star. It might even have helped me to have more appreciation for some of my elders in the economics profession. But maybe I should be worrying instead about what the young hot shots in economics are thinking of me.

Summers’s outlook on economic policy can be summarized by the remark that he gave me some years ago: “If I had your views on economics, I would find another profession.” He meant that if free markets usually worked well and the government ought usually to stay out, then he would find economics to be an uninteresting occupation. Fortunately for Summers, he has always believed in the potential benefits from governmental activism, although the strength of this belief may have diminished over time.

The last chapter modeled technological progress as an increase in the number of types of products, N. In this chapter, we allow for improvements in the quality or productivity of each type. This approach has come to be known as the Schumpeterian approach to endogenous growth. We can think of increases in N as basic innovations that amount to dramatically new kinds of goods or methods of production. In contrast, increases in the quality of the existing products involve a continuing series of improvements and refinements of goods and techniques.