The idea is that we've greatly underestimated how much innovation improved the standard of living as defined by GDP growth and other standard growth estimates during the "Special Century" (1870-1970) This has led to an overestimate of how much more recent innovations (since 1970) have impacted standard of living, wage stagnation, etc.
The prognosis...a continued slowing of growth for the foreseeable future unless truly astounding innovations occur or...we all get replaced by robots that are smarter than us. An event called the "singularity".
JSO, you might want to read this book. It appears to blow a hole in your standard of living-quintile thingies.
http://www.nybooks.com/articles/2016/08 ... will-fall/Why Growth Will Fall
William D. Nordhaus AUGUST 18, 2016 ISSUE
The Rise and Fall of American Growth: The US Standard of Living Since the Civil War
by Robert J. Gordon
Robert Gordon has written a magnificent book on the economic history of the United States over the last one and a half centuries. His study focuses on what he calls the “special century” from 1870 to 1970—in which living standards increased more rapidly than at any time before or after. The book is without peer in providing a statistical analysis of the uneven pace of growth and technological change, in describing the technologies that led to the remarkable progress during the special century, and in concluding with a provocative hypothesis that the future is unlikely to bring anything approaching the economic gains of the earlier period.
The message of Rise and Fall is this. For most of human history, economic progress moved at a crawl. According to the economic historian Bradford DeLong, from the first rock tools used by humanoids three million years ago, to the earliest cities ten thousand years ago, through the Middle Ages, to the beginning of the Industrial Revolution around 1800, living standards doubled (with a growth of 0.00002 percent per year). Another doubling took place over the subsequent period to 1870. Then, according to standard calculations, the world economy took off.
Gordon focuses on growth in the United States. Living standards, as measured by GDP per capita or real wages, accelerated after 1870. The growth rate looks like an inverted U. Productivity growth rose from the late nineteenth century and peaked in the 1950s, but has slowed to a crawl since 1970. In designating 1870–1970 as the special century, Gordon emphasizes that the period since 1970 has been less special. He argues that the pace of innovation has slowed since 1970 (a point that will surprise many people), and furthermore that the gains from technological improvement have been shared less broadly (a point that is widely appreciated and true).
