A Theory of Intelligence and Total Factor Productivity: Value Added Reflects the Fruits of Fluid Intelligence
AbstractIn this paper, a theory of total factor productivity (TFP) that incorporates a model of intelligence is formulated and described. In particular, the fluid intelligence of ordinary workers is emphasized as an important element in TFP because such workers have the intelligence to innovate, even though their innovations are minor. Nevertheless, these innovations are essential for production because they solve many small but unexpected problems that ordinary workers must address. The TFP model is based on item response theory, which is widely used in psychology and psychometrics. TFP is assumed to be an increasing function of ordinary workers’ fluid intelligence, without which production is virtually impossible. Therefore, the model suggests that TFP is derived from the fruits of human intelligence.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 43151.
Date of creation: 07 Dec 2012
Date of revision:
Total factor productivity; Intelligence; Innovation; Item response theory; Experience curve effect;
Find related papers by JEL classification:
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-EFF-2012-12-15 (Efficiency & Productivity)
- NEP-INO-2012-12-15 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Growiec, Jakub, 2006.
"A New Class of Production Functions and an Argument Against Purely Labor-Augmenting Technical Change,"
7069, University Library of Munich, Germany.
- Jakub Growiec, 2008. "A new class of production functions and an argument against purely labor-augmenting technical change," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(4), pages 483-502.
- GROWIEC, Jakub, 2006. "A new class of production functions and an argument against purely labor-augmenting technical change," CORE Discussion Papers, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2006056, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Edward P. Lazear, 2003. "Firm-Specific Human Capital: A Skill-Weights Approach," NBER Working Papers 9679, National Bureau of Economic Research, Inc.
- Norman Keith Womer, 1984. "Estimating Learning Curves from Aggregate Monthly Data," Management Science, INFORMS, INFORMS, vol. 30(8), pages 982-992, August.
- Yin-wong Cheung & Antonio Garcia-Pascual, 2004.
"Testing for Output Convergence: A Re-examination,"
052004, Hong Kong Institute for Monetary Research.
- Dudley, Leonard, 1972. "Learning and Productivity Change in Metal Products," American Economic Review, American Economic Association, vol. 62(4), pages 662-69, September.
- Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 70, pages 9.
- Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, Elsevier, vol. 34(2), pages 143-173, October.
- Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Alan Krueger & Mikael Lindahl, 2000.
"Education for Growth: Why and For Whom?,"
808, Princeton University, Department of Economics, Industrial Relations Section..
- van der Zwaan, Bob & Rabl, Ari, 2004. "The learning potential of photovoltaics: implications for energy policy," Energy Policy, Elsevier, vol. 32(13), pages 1545-1554, September.
- Patrick Criqui & Jean-Marie Martin & Leo Schrattenholzer & Tom Kram & Luc Soete & Adriaan Van Zon, 2000. "Energy technology dynamics," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, Inderscience Enterprises Ltd, vol. 14(1/2/3/4), pages 65-103.
- Mankiw, N Gregory & Romer, David & Weil, David N, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics, MIT Press,
MIT Press, vol. 107(2), pages 407-37, May.
- Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
- Papineau, Maya, 2006. "An economic perspective on experience curves and dynamic economies in renewable energy technologies," Energy Policy, Elsevier, vol. 34(4), pages 422-432, March.
- Womer, N Keith & Patterson, J Wayne, 1983. "Estimation and Testing of Learning Curves," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 1(4), pages 265-72, October.
- Prescott, Edward C, 1998.
"Needed: A Theory of Total Factor Productivity,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-51, August.
- Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
- Miketa, Asami & Schrattenholzer, Leo, 2004. "Experiments with a methodology to model the role of R&D expenditures in energy technology learning processes; first results," Energy Policy, Elsevier, vol. 32(15), pages 1679-1692, October.
- Martin B. Zimmerman, 1982. "Learning Effects and the Commercialization of New Energy Technologies: The Case of Nuclear Power," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 297-310, Autumn.
- Lazear, Edward, 2003. "Firm-Specific Human Capital: A Skill-Weights Approach," IZA Discussion Papers 813, Institute for the Study of Labor (IZA).
- Charles I. Jones, 2005.
"The Shape of Production Functions and the Direction of Technical Change,"
The Quarterly Journal of Economics, MIT Press,
MIT Press, vol. 120(2), pages 517-549, May.
- Charles I. Jones, 2004. "The Shape of Production Function and the Direction of Technical Change," NBER Working Papers 10457, National Bureau of Economic Research, Inc.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy, University of Chicago Press,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Marvin B. Lieberman, 1984. "The Learning Curve and Pricing in the Chemical Processing Industries," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 213-228, Summer.
- Eelke Wiersma, 2007. "Conditions That Shape the Learning Curve: Factors That Increase the Ability and Opportunity to Learn," Management Science, INFORMS, INFORMS, vol. 53(12), pages 1903-1915, December.
- Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
- Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 66, pages 281.
- Harashima, Taiji, 2009. "A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers’ Innovations as an Essential Element," MPRA Paper 15508, University Library of Munich, Germany.
- Gary P. Pisano & Richard M.J. Bohmer & Amy C. Edmondson, 2001. "Organizational Differences in Rates of Learning: Evidence from the Adoption of Minimally Invasive Cardiac Surgery," Management Science, INFORMS, INFORMS, vol. 47(6), pages 752-768, June.
- McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
- Harashima, Taiji, 2011. "A Model of Total Factor Productivity Built on Hayek’s View of Knowledge: What Really Went Wrong with Socialist Planned Economies?," MPRA Paper 29107, University Library of Munich, Germany.
- Harashima, Taiji, 2014. "Division of Work and Fragmented Information: An Explanation for the Diminishing Marginal Product of Labor," MPRA Paper 56301, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.