Leading sectors, lead economies, and economic growth

In the literature on international political economy, some approaches to long-term economic growth and global political-economic leadership assume the intermittent presence of a singular lead economy. Among other things, the lead economy generates radical innovations in commercial and industrial leading sectors that serve as a platform for global political leadership. The innovations drive the lead economy's own growth, diffuse to the rest of the world, and drive the growth of the world economy. While others have demonstrated that lead economies monopolize the production of radical innovations, for the first time we test the empirical relationships among one lead economy's leading sectors, its aggregate growth, and the growth of the world economy. Focusing on the 1870–1990 US experience, we find that US leading sector activity and aggregate growth both drive world economic growth. These relationships wax and wane according to the life cycles of leading sector innovations and the intermittency of economic leadership. The basic point is that economics is and has been a global process influenced by first the concentration and then the diffusion of major innovations via the agency of political-economic leadership in the world economy.

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