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Investment-specific technology growth: concepts and recent estimates

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  • Michael R. Pakko

Abstract

The strength of U.S. productivity growth in recent years has been attributed to technological improvements that are, in some sense, embodied in new types of capital equipment. However, traditional growth theory and growth accounting techniques—which emphasize the role of disembodied, neutral technological progress—are deficient in explaining this phenomenon. In this article, Michael R. Pakko outlines a model of investment-specific technological change that has become popular for describing the notion of capital-embodied growth and summarizes some recent estimates of the importance of this type of technological progress for assessing U.S. productivity trends.

Suggested Citation

  • Michael R. Pakko, 2002. "Investment-specific technology growth: concepts and recent estimates," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 37-48.
  • Handle: RePEc:fip:fedlrv:y:2002:i:nov:p:37-48:n:v.84no.6
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    References listed on IDEAS

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    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Andreas Hornstein, 1999. "Growth accounting with technological revolutions," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 1-22.
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    4. King, Robert G & Rebelo, Sergio T, 1993. "Transitional Dynamics and Economic Growth in the Neoclassical Model," American Economic Review, American Economic Association, vol. 83(4), pages 908-931, September.
    5. Jorgenson, Dale W., 1966. "The Embodiment Hypothesis," Scholarly Articles 3403063, Harvard University Department of Economics.
    6. David Andolfatto & Glenn MacDonald, 1998. "Technology Diffusion and Aggregate Dynamics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 338-370, April.
    7. Dale W. Jorgenson, 1966. "The Embodiment Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 74, pages 1-1.
    8. Hercowitz, Zvi, 1998. "The 'embodiment' controversy: A review essay," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 217-224, February.
    9. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    10. Michael Gort & Jeremy Greenwood & Peter Rupert, 1999. "Measuring the Rate of Technological Progress in Structures," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 207-230, January.
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    Cited by:

    1. Mumtaz, Haroon & Zanetti, Francesco, 2012. "Neutral technology shocks and employment dynamics: results based on an RBC identification scheme," Bank of England working papers 453, Bank of England.
    2. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2008. "The productivity paradox and the new economy: The Spanish case," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1569-1586, December.
    3. Bakhshi, Hasan & Larsen, Jens, 2005. "ICT-specific technological progress in the United Kingdom," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 648-669, December.
    4. Gomme, Paul & Rupert, Peter, 2007. "Theory, measurement and calibration of macroeconomic models," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 460-497, March.
    5. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2010. "ICT-specific technological change and productivity growth in the US: 1980-2004," Information Economics and Policy, Elsevier, vol. 22(2), pages 121-129, May.
    6. Tahir Abdi, 2008. "Machinery & equipment investment and growth: evidence from the Canadian manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 40(4), pages 465-478.

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    Keywords

    Technology ; Productivity;

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