Economic Growth, Technical Progress and Labor Productivity

1969

OECD Economics Department Working Papers, 2000

Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format ECO/WKP(2000)32 2 ABSTRACT/RÉSUMÉ In this paper we present an international comparison of growth trends in the OECD countries, with a special attention to developments in labour productivity-allowing for human capital accumulation-and multifactor productivity (MFP)-allowing for changes in the composition of fixed capital. An attempt is also made to identify both the embodied (in particular in ICT equipment) and disembodied components of technical progress. The possible relation between improvements in MFP and the accumulation of knowledge (as proxied by R&D expenditures) is discussed, and some tentative policy considerations are advanced, mainly with reference to general framework conditions that might have a bearing in fostering technological changes. The main conclusions are that some "traditional" factors lay behind the disparities in growth patterns across the OECD countries. In particular, they refer to the ability of countries to employ their labour force. There also seem to be some new factors behind growth performance, especially in connection with the diffusion of ICT and related increases in MFP growth rates in the United States. However, it is too early to say whether, even in the United States, the more recent pickup in the (disembodied) component of MFP may also be related to the presence of spillover and network effects.

World Development, 1991

This paper presents an integratcd view of what is termed a "structuralist'" perspective to economic growth and development that stands in contrast to the mainstream orthodox or neoclassical view. In the structuralist view, structural changes are causes of growth rather than outcomes of a process of capital accumulation and of rising per capita incomes. Moreover, the growth process may be punctuated by periods of discrete shifts in resource allocation ("creative destruction") and growth acceleration rather than being smooth throughout. Structural changes need not be automatic, they require a skill-specific infrastructure of new capabilities which, when established, generate new comparative advantages. Market failures may be pervasive due to problems of human capital accumulation, critical mass and discrete choice among alternative growth paths. Thus in addition to creating a favorable environment for business and assuring, through macroeconomic policy, adequate investment, successful growth may require an adequate industrial and technological policy, particularly at nodes of structural change. The paper surveys the structuralist insights appearing in the literature, starting with the early postwar economic development literature and including recently developed formal models. It also proposes a kinked or scalloped aggregate production function as a simple tool for structuralist analysis.

R&D based models relating technical change and economic growth have been unsuccessful in explaining the recent productivity paradox: R&D efforts have risen continuously in advanced countries during the postwar period whereas productivity growth has, if anything, declined. Several explanations of the paradox are offered, together with empirical ways of testing them. The notion that R&D efforts are more and more attributed to product differentiation, thus enlarging consumers' welfare while simultaneously exhibiting only limited effects on economic growth, looks very promising in explaining the productivity paradox.

Mathematics and Computers in Simulation, 2008

ISRN Economics, 2014

Journal of Economic Surveys, 2003

The relationship between productivity, technology and economic growth has been debated extensively in the endogenous growth, growth accounting, New Economy and policy literature. This paper briefly surveys the literature on total factor productivity (TFP) calculations-the various techniques and problems associated with it. We argue that TFP is not a measure of technological change and only under ideal conditions does it measure the supernormal profits associated with technological change. The critical driving force of economic growth is not the super normal profits that technological change generates but rather the continuous creation of opportunities for further technological development. Six illustrations of when TFP fails to correctly measure these super normal profits are provided. A version Carlaw and Lipsey's (2003b) model of endogenous general purpose technology-driven growth is then utilized to make some progress toward answering Prescott's (1998) call for a theory of TFP. The model is used to simulate artificial data and connect theoretical assumptions of returns to scale and resource costs to the conditions under which TFP miss-measures the actual growth of technological knowledge.

Journal of Economic Theory, 1974

According to prevailing opinion, only the neutral form of technological progress in the Harrod sense is consistent with balanced growth in a one-sector constant returns-to-scale economy. Though various definitions of balanced growth are in use in the literature, the above highly restrictive technological condition is believed to hold for all of them. The paper demonstrates that this belief is not correct. The condition is shown to be false if the definition of balanced growth (i) does not require the constancy of the marginal product of capital (or the interest rate), and (ii) permits the time semiinfinite or indeed any finite balanced growth path. More specifically, under (i) and (ii) there exists a balanced growth path consistent with a significantly wide class of technological changes of the capital-using (labour-saving) form in the Harrod sense. Alternatively, this condition is correct if either (i) the interest rate is required to be constant or (ii) growth is balanced if it is such for all time-mat is, for both past and future. The condition is also correct if the socioeconomic institutions are such that the constancy of the savings ratio implies the constancy of the capital share.

Research in Economic History, 2006

This study consists of an examination of productivity growth following three major technological breakthroughs: the steam power revolution, electrification and the ICT revolution. The distinction between sectors producing and sectors using the new technology is emphasized. A major finding for all breakthroughs is that there is a long lag from the time of the original invention until a substantial increase in the rate of productivity growth can be observed. There is also strong evidence of rapid price decreases for steam engines, electricity, electric motors and ICT products. However, there is no persuasive direct evidence that the steam engine producing industry and electric machinery had particularly high productivity growth rates. For the ICT revolution the highest productivity growth rates are found in the ICT-producing industries. We suggest that one explanation could be that hedonic price indexes are not used for the steam engine and the electric motor. Still, it is likely that the rate of technological development has been much more rapid during the ICT revolution compared to any of the previous breakthroughs.

Recent decades have witnessed dramatic disruptional changes in labour markets around the world. Specifically, there appears to be a distinct decline in the labour share of national income across the globe—in particular from the 1980s onwards. In this paper, I address the following question: which modern forces are driving new structural tendencies in emerging market and developing countries (EMDCs) and imposing adverse effects on the distribution of income? I start with a consideration of the most pertinent literature on the topic, outlining the “textbook story” of globalization and technological change. While the literature confronts this decline in advanced economies in recent work, less attention has been granted to emerging markets. This paper proposes to analyze the recent incorporation of advanced technologies in production and the subsequent effects on the labour share of income utilizing a Kaldorian analysis of the manufacturing sector in EMDCs. Using fixed effects regression methods on a panel time-series dataset, covering 24 of today’s most prominent emerging market economies over the period of 1980-2011, this study also examines a variety of mechanisms that may be causing recent variability in the labour share. Motivated by recent empirical work, this study focuses on the role of technological progress, its complex relationship with globalization and policy variables. Further, this study highlights the simultaneous reduction of the manufacturing share in employment and increase in manufacturing output—a recent phenomenon referred to as “premature deindustrialization” driven by the decreasing costs of computation defined by Moore’s Law.