Update 8/6/2010 3:30pm Response to RT @auerswald People r (Not) Statistical Noise http://bit.ly/bAwtpQ: on objection that small bursts of creativity can have very large effects. Um, yes, it's called non rivalry of ideas (and music scores). Many people can simultaneously use the same idea/score. And everyone wants to use the best ones. So the scale effects can be Gigantic. I guess I had noticed I'm not the only one who likes Mozart.
The evidence says High Growth is likely to include a temporary component that will not recur. So High Growth countries in one period will likely experience a decrease in growth in the following period, moving them back DOWN towards the world mean.
The graph below shows a typical regression to the mean graph for a few data-points. The mean of the data is roughly 2 (where the mean reversion line crosses the horizontal axis). Years above 2 are usually followed by a decrease, while years below 2 are usually followed by an increase.
What’s slightly different about this graph is that the numbers here like “2” don’t refer to average annual economic growth, but to the number of masterpieces produced by Mozart every year from 1781 (after he moved to Vienna) until his death in 1791. Mozart produced 18 major classics over this period, or about 2 per year.
However, his economic growth number of masterpieces produced each year fluctuated a lot. For example, in 1788 Mozart produced three of the greatest symphonic breakthroughs of all time (Symphonies 39, 40, and 41), but in 1789 there were no new masterpieces at all.
I decided to discuss this with Mozart to see if we can get any more insight into what drives good and bad years.
Me: I love your symphonies 39, 40, and 41, congrats on having such a great year in 1788.
Me: Why did you have such a bad year in 1789?
Mozart: Let me get this straight, I revolutionized music with 18 masterpieces in a decade, and your main concern is that I didn’t spread them out more evenly across years?
Me: I just thought we could discover your secret to success by comparing the good years with the bad years.
Mozart: (Whispers to his servant: “Check with Viennese insane asylum whether they are missing a patient…”) I was learning and experimenting all my life, which all contributed to my miraculous final decade. When the masterworks happened to come out during that decade is arbitrary and of no importance whatsoever.
I learned from Herr Mozart that musical creativity, like economic growth, proceeds in fits and starts, and we should not be so obsessed with short term fluctuations.
Also I would not dare apply the words “random” or “lucky” to The Marriage of Figaro. Bursts of creativity, like bursts of rapid growth due to, say, entrepreneurial breakthroughs, may be temporary but they are not “random” in any mechanical sense. They reflect the best of humanity’s purposeful activity, and they stay with us forever even if the original creative moment is fleeting.