The Past and Future of America's Economy: Long Waves of Innovation That Power Cycles of Growth.

• Author: Field, Alexander J.
• Position: Book Review

The Past and Future of America's Economy: Long Waves of Innovation That Power Cycles of Growth By Robert D. Atkinson Cheltenham, U.K.: Edward Elgar, 2004. Pp. vii, 357. $85.00 cloth.

The Past and Future of America's Economy is a discourse on the economic and political history of the United States and its economic prospects. Robert Atkinson is vice president of the Progressive Policy Institute, and the book is written from a New Democratic perspective. The author favors policies to reorient macroeconomic policy away from short-run issues of using fiscal and monetary policy to tame the business cycle (or inflation) and toward government actions that promise to promote growth and productivity improvement. President Bill Clinton's efforts to produce balanced budgets and even surpluses (thereby increasing national saving and lowering interest rates) are examples. Unlike many within the Republican Party, however, Atkinson sees an important role for government in fostering advance at the microeconomic level, particularly in areas involving pro-growth regulation or its reconfiguration, financing of research and development, and the creation of data-interchange standards. The strongest chapters in the book come toward the end (for example, chapter 9), where the author details specific policy initiatives he believes would be beneficial in increasing growth in output per hour in the economy. Atkinson has been involved in developing several of these proposals and can speak about them with authority.

Atkinson's motivation for the historical emphasis is his belief that the U.S. economy has undergone discontinuous waves of economic change approximately once every half century. These changes, in turn, have required changes in the economy's institutional and regulatory structure in order to yield their full benefits. The "Third Way" championed by Atkinson and the Progressive Policy Institute aims to transcend what are viewed as reactionary tendencies both within the Democratic Party, which wants to build upon (rather than simply preserve) the New Deal and restore the economic world of the 1950s and 1960s, and within the Republican Party, which wants to restore the world of William McKinley and Calvin Coolidge and return to the economic world of the 1890s or the 1920s.

Atkinson views the Great Depression as the consequence of the exhaustion of one of these technological Kondratief cycles. He interprets the collapse of productivity growth between 1973 and...