Pooley-Tupy theorem

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The Pooley-Tupy theorem is an economics theorem which measures the growth in knowledge resources over time at individual and population levels.

Contents

The theorem was formulated by Gale Pooley and Marian Tupy who developed the approach in 2018 in their paper: The Simon Abundance Index: A New Way to Measure Availability of Resources. [1] [2]

The theorem is informed by the work of Julian Simon, George Gilder, Thomas Sowell, F. A. Hayek, Paul Romer, and others. [3] [4] [5] [6] [7] [8]

Gilder offers three axioms; wealth is knowledge, growth is learning, and money is time. From these propositions a theorem can be derived: The growth in knowledge can be measured with time.

While money prices are expressed in dollar and cents, time prices are expressed in hours and minutes. A time price is equal to the money price divided by an hourly income rate.

The Pooley-Tupy theorem adds changes in population as an additional variable in their formulation. In the case of an individual, population is equal to 1 at and .

Examples

If knowledge resources were being evaluated at the individual level and the time price was 60 minutes at and 45 minutes at , the percentage change in knowledge resources would be:

If population at was 100 and 200 at , the percentage change in knowledge resources would be:

Other equations

The Pooley-Tupy Theorem is part of an analytical framework that uses several other equations for analysis. This framework is described in their book, Superabundance: The story of population growth, innovation, and human flourishing on an infinitely bountiful planet. [9] [10] [11]

The percentage change in a time price over time can be expresses as:

The resource multiplier indicates how much more or less of a resource the same amount of time can buy at two points in time.

The percentage change in the resource multiplier is just the resource multiplier minus one.

The compound annual growth rate or CAGR can be calculated as:

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<span class="mw-page-title-main">Gale Pooley</span> American economist and author

Gale L. Pooley is an American economist, professor, and author, recognized for his work in economics and real estate valuation. Dr. Gale Pooley is currently a professor of economic history at Utah Tech University. He previously held a position as Associate Professor at Brigham Young University–Hawaii (BYU-Hawaii), where he taught in the Department of Business and Government as the lead for the economics program. His academic career also includes teaching positions at Alfaisal University in Riyadh, Brigham Young University–Idaho, Boise State University, and the College of Idaho, in the fields of business, statistics, and economics. Pooley holds professional designations from the Appraisal Institute, the Royal Institution of Chartered Surveyors, and the CCIM Institute. Pooley is renowned for his contributions to the field of economics, particularly through his work on the concept of abundance and population growth.

Marian L. Tupy is a Czechoslovak-born researcher and writer specializing in globalization, global well-being, and the politics and economics of Europe and Southern Africa. He is the editor of HumanProgress.org and a senior fellow at the Cato Institute's Center for Global Liberty and Prosperity. Tupy is known for his contributions to discussions on population growth and resource abundance.

References

  1. Pooley, Gale L.; Tupy, Marian L. (4 December 2018). "The Simon Abundance Index: A New Way to Measure Availability of Resources". www.cato.org. Retrieved 5 September 2024.
  2. Pooley, Gale and Marian Tupy (December 4, 2018). "The Simon Abundance Index: A New Way to Measure Availability of Resources". Cato Policy Analysis NO. 857.
  3. Gilder, George F. (2023). Life after capitalism: the meaning of wealth, the future of the economy, and the time theory of money. Washington, D.C.: Regnery Gateway. ISBN   978-1-68451-224-9. OCLC   1346534521.
  4. Sowell, Thomas (1980). Knowledge and decisions. New York: Basic Books. ISBN   978-0-465-03736-0.
  5. Simon, Julian Lincoln (1998). The ultimate resource 2. Princeton paperbacks Economics (2. ed., rev. ed., 3. printing and 1. paperback printing ed.). Princeton, NJ: Princeton Univ. Press. ISBN   978-0-691-00381-8.
  6. Hayek, F. A. The Use of Knowledge in Society .
  7. Gilder, George F. (2013). Knowledge and power: the information theory of capitalism and how it is revolutionizing our world. Washington, DC: Regnery Publishing, Inc. ISBN   978-1-62157-027-1. OCLC   807025294.
  8. Romer, Paul M. (1990). "Endogenous Technological Change". Journal of Political Economy. 98 (5): S71–S102. doi:10.1086/261725. ISSN   0022-3808. JSTOR   2937632.
  9. "Superabundance: Population Growth, Innovation, and Human Flourishing". Superabundance.
  10. Tupy, Marian L.; Pooley, Gale Lyle (2022). Superabundance: the story of population growth, innovation, and human flourishing on an infinitely bountiful planet. Washington, D.C.: Cato Institute. ISBN   978-1-952223-39-6.
  11. "Superabundance: Population Growth, Innovation, and Human Flourishing". Superabundance. Retrieved 2024-06-11.