In 1500, China’s economy was the strongest in the world. But by the 19th century, the United States, Western Europe, and Japan had leapfrogged over China by churning out goods and services in vast quantities while the former superpower stalled.

Why? Some economists argue that China’s lack of free markets and unencumbered innovation in the West led to the shift. But what is the relationship between innovation and markets, productivity, and inequality?

The answer to that puzzle and others were explored during a recent forum on the relationship of innovation to economic growth at the Hoover Institution. Three Stanford professors, all Hoover fellows—Stephen Haber, Edward Lazear, and Amit Seru—spoke on a panel moderated by Jonathan Levin, dean of Stanford Graduate School of Business.

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