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Can general purpose technology theory explain economic growth? Electrical power as a case study

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Abstract

Does the concept of General Purpose Technologies help explain periods of faster and slower productivity advance in economies? The paper develops a new comparative data set on the usage of electricity in the manufacturing sectors of the USA, Britain, France, Germany and Japan and proceeds to evaluate the hypothesis of a productivity bonus as postulated by many existing GPT models. Using the case of the diffusion of electrical power in the early twentieth century this paper shows that there was no generalized productivity boost from electrical power diffusion as postulated by many existing GPT models. The productivity gains from this GPT varied widely across economies and industries, suggesting that the power of GPTs to predict aggregate or sectoral growth is limited.

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  • Cristiano Andrea Ristuccia & Solomos Solomou, "undated". "Can general purpose technology theory explain economic growth? Electrical power as a case study," Working Papers 18, Department of Economic and Social History at the University of Cambridge.
    • Handle: RePEc:cmh:wpaper:18
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    1. Harvey, A C, 1985. "Trends and Cycles in Macroeconomic Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 216-227, June.
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    Cited by:

    1. Enrico Santarelli & Jacopo Staccioli & Marco Vivarelli, 2023. "Automation and related technologies: a mapping of the new knowledge base," The Journal of Technology Transfer, Springer, vol. 48(2), pages 779-813, April.
    2. Cantner, Uwe & Vannuccini, Simone, 2021. "Pervasive technologies and industrial linkages: Modeling acquired purposes," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 386-399.
    3. Olena Ivus & Matthew Boland, 2015. "The employment and wage impact of broadband deployment in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 48(5), pages 1803-1830, December.
    4. Mario COCCIA, 2017. "The Fishbone diagram to identify, systematize and analyze the sources of general purpose technologies," Journal of Social and Administrative Sciences, KSP Journals, vol. 4(4), pages 291-303, December.
    5. Crafts, Nicholas & Mills, Terence C., 2020. "Is The Uk Productivity Slowdown Unprecedented?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 251, pages 47-53, February.
    6. Coccia, Mario, 2015. "General sources of general purpose technologies in complex societies: Theory of global leadership-driven innovation, warfare and human development," Technology in Society, Elsevier, vol. 42(C), pages 199-226.
    7. Barry Eichengreen, 2015. "Secular Stagnation: The Long View," American Economic Review, American Economic Association, vol. 105(5), pages 66-70, May.
    8. Mario Coccia, 2017. "General purpose technologies in dynamic systems: visual representation and analyses of complex drivers," IRCrES Working Paper 201705, CNR-IRCrES Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Torino (TO) ITALY.
    9. Clifford Bekar & Kenneth Carlaw & Richard Lipsey, 2018. "General purpose technologies in theory, application and controversy: a review," Journal of Evolutionary Economics, Springer, vol. 28(5), pages 1005-1033, December.
    10. Crafts, Nicholas, 2020. "British Relative Economic Decline in the Aftermath of German Unification," CAGE Online Working Paper Series 501, Competitive Advantage in the Global Economy (CAGE).
    11. Coccia, Mario, 2018. "A Theory of the General Causes of Long Waves: War, General Purpose Technologies, and Economic Change," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 287-295.
    12. Shakouri, Hamed & Pandey, Shikhar & Rahmatian, Farnoosh & Paaso, Esa A., 2023. "Does the increased electricity consumption (provided by capacity expansion and/or reliability improvement) cause economic growth?," Energy Policy, Elsevier, vol. 182(C).
    13. Nils Grashof & Alexander Kopka, 2023. "Artificial intelligence and radical innovation: an opportunity for all companies?," Small Business Economics, Springer, vol. 61(2), pages 771-797, August.
    14. Zhang, Yi & Wu, Mengjia & Miao, Wen & Huang, Lu & Lu, Jie, 2021. "Bi-layer network analytics: A methodology for characterizing emerging general-purpose technologies," Journal of Informetrics, Elsevier, vol. 15(4).
    15. Kemnitz, Alexander & Knoblach, Michael, 2020. "Endogenous sigma-augmenting technological change: An R&D-based approach," CEPIE Working Papers 02/20, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    16. Jeffrey Ding & Allan Dafoe, 2021. "Engines of Power: Electricity, AI, and General-Purpose Military Transformations," Papers 2106.04338, arXiv.org.
    17. Ding, Jeffrey, 2022. "Techno-industrial Policy for New Infrastructure: China’s Approach to Promoting Artificial Intelligence as a General Purpose Technology," Institute on Global Conflict and Cooperation, Working Paper Series qt1sb844ws, Institute on Global Conflict and Cooperation, University of California.
    18. Luca Agnello & Vítor Castro & Ricardo M. Sousa, 2023. "Interest rate gaps in an uncertain global context: why “too” low (high) for “so” long?," Empirical Economics, Springer, vol. 64(2), pages 539-565, February.
    19. Treu, Johannes, 2022. "FinTech, General Purpose Technology und Wohlfahrt," IU Discussion Papers - Business & Management 5 (Juni 2022), IU International University of Applied Sciences.
    20. Nils Grashof & Alexander Kopka, 2023. "Widening or closing the gap? The relationship between artificial intelligence, firm-level productivity and regional clusters," Bremen Papers on Economics & Innovation 2304, University of Bremen, Faculty of Business Studies and Economics.
    21. Liu, Yong & Du, Jun-liang & Yang, Jin-bi & Qian, Wu-yong & Forrest, Jeffrey Yi-Lin, 2019. "An incentive mechanism for general purpose technologies R&D based on the concept of super-conflict equilibrium: Empirical evidence from nano industrial technology in China," Technological Forecasting and Social Change, Elsevier, vol. 147(C), pages 185-197.
    22. Johannes Treu, 2023. "The Chance of FinTech to be a New General-Purpose Technology," International Business Research, Canadian Center of Science and Education, vol. 16(11), pages 1-22, November.
    23. Sergio Petralia, 2020. "GPTs and Growth: Evidence on the Technological Adoption of Electrical & Electronic Technologies in the 1920s," Papers in Evolutionary Economic Geography (PEEG) 2033, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2020.

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    More about this item

    Keywords

    General Purpose Technologies; Economic Growth; Economic History; Productivity; Long Swings;
    All these keywords.

    JEL classification:

    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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