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The transition to a new economy after the Second Industrial Revolution

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  • Andrew Atkeson
  • Patrick J. Kehoe

Abstract

During the Second Industrial Revolution, 1860?1900, many new technologies, including electricity, were invented. After this revolution, however, several decades passed before these new technologies diffused and measured productivity growth increased. We build a quantitative model of technology diffusion which we use to study this transition to a new economy. We show that the model implies both slow diffusion and a delay in growth similar to that in the data. Our model casts doubt, however, on the conjecture that this experience is a useful parallel for understanding the productivity paradox following the Information Technology Revolution.

Suggested Citation

  • Andrew Atkeson & Patrick J. Kehoe, 2002. "The transition to a new economy after the Second Industrial Revolution," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  • Handle: RePEc:fip:fedfpr:y:2002:i:nov:x:2
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    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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