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The Contribution of New Technology to Economic Growth: Lessons from Economic History

  • Crafts, Nicholas

    (University of Warwick)

This paper reviews the analysis of technological change by cliometricians. It focuses on lessons about total factor productivity (TFP) from growth accounting and on aspects of social capability that are conducive to the effective assimilation of new technology. Key messages are that when TFP growth is very rapid this typically involves reductions in inefficiency not just technological advance and that even really important new technologies have small initial effects on aggregate productivity. Incentive structures matter greatly for the adoption of new technology but social capability is not independent of the technological epoch as the ICT era has emphasized to Europeans.

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Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 01.

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Date of creation: 2010
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Handle: RePEc:cge:wacage:01
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