GDP declines align with recessions, where unemployment rises. This matters for business cycle analysis.

Why should a business cycle analyst care if some shmuck in Los Angeles drives their Lambo into a post and nobody is hurt?

Aggregate depreciation
1) cannot be measured;
2) is of very little interest.

GDP is of interest because GDP growth effectively defines the business cycle.

An economics 101 textbook cannot discuss every single concept in finance, accounting, and economics.

GDP is defined the way it is for very good reasons. However, it is not expected to capture everything in an economy, and nobody sensible expects it to.

GDP measures the flow of production, not the stock of national
assets. Since there’s no way to measure household balance sheets, household purchases are treated as consumption - an immediate write-off.

GDP is useful because it equals Gross Domestic Income. Changing GDP breaks that equality.

Never really ran into that concept, but auto sales are relatively flat in real terms in North America, so depreciation would be similar.

In a services-oriented economy, depreciation is going to be less meaningful.

Sure, it took a century, and the new technologies came in while the old ones were still making their presence known. The problem for econs is that the data makes it look like it was a smooth, century-long productivity boom.

Victoria 3 does a good job of showing what was going on at a high level.

It is, but as my other comments noted, they don’t have the massive work shifting the industrial revolution did - but that’s completely unsurprising. They still make a big difference.

The logic is straightforward: the Industrial Revolution broke ~99% of humans out of the trap of subsistence farming (in some countries). To make a similar breakthrough, you need to do a similar task replacement. Which means we need science fictional self-replicating robots.

I’m sure that AGI will add as much to trend GDP growth as NFTs.

If you want to go science fiction, to replicate Industrial Revolution growth numbers, you need self-replicating robots, like in Asimov’s Robot books or Saberhagen’s Berserkers (although the Berserkers were bad for human growth…).

(…Lower than the 1950s)

Economists got into a strange mental trap by explaining everything as magical “total factor productivity” improvements without tying those improvements to actual technological changes.

“Oh noes, my total factor productivity growth is lower the 1950s” - No $&%* Sherlock.

Thanks. I think the premise that we cannot replicate the impact of the Industrial Revolution is true (the energy we can harness would be incomprehensible to earlier eras). But, you can only drag humanity out of subsistence farming once, so why would anyone expect similar growth rates?

As an ex-electrical engineer, I am a lot more impressed in what is coming out of other areas, like mRNA vaccines. Solar cells seem to be one of the largest pure EE developments (unclear to me how much Silicon Valley has to do with them at this point, seems like China is dominating).