If half of the sectors are growing and half are not, the "better" half will become a larger and larger fraction of the economy. So the growth rate of the overall economy will asymptotically approach 4%.
I know nothing about macro but that sounds unlikely, but that's still how I interpret your question.
If e.g. computers get way better but housing is stagnant, people are still going to want housing, so why would the fraction of the economy devoted to housing go down?
The growth rate will gradually approach 4% as that sector more and more dominates. And no, it doesn’t matter, economically, if the growth sector is virtual (however defined).
It depends what fraction of the economy is in the growing vs. stagnant sectors. I’d expect the growing sectors to shrink (additional output has diminishing returns and maintaining the same output requires fewer inputs because of growth), hence I’d expect stagnation overall, but other scenarios are possible.
If half of the sectors are growing and half are not, the "better" half will become a larger and larger fraction of the economy. So the growth rate of the overall economy will asymptotically approach 4%.
I know nothing about macro but that sounds unlikely, but that's still how I interpret your question.
If e.g. computers get way better but housing is stagnant, people are still going to want housing, so why would the fraction of the economy devoted to housing go down?
Maybe he meant: it is always true that half the *economy* is growing at 4% and half at 0%. But that supposition seems unmotivated.
Yup
The growth rate will gradually approach 4% as that sector more and more dominates. And no, it doesn’t matter, economically, if the growth sector is virtual (however defined).
It depends what fraction of the economy is in the growing vs. stagnant sectors. I’d expect the growing sectors to shrink (additional output has diminishing returns and maintaining the same output requires fewer inputs because of growth), hence I’d expect stagnation overall, but other scenarios are possible.