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The sources of growth in a technologically progressive economy: the United States, 1899-1941

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  • Bakker, Gerben
  • Crafts, Nicholas
  • Woltjer, Pieter

Abstract

We develop new aggregate and sectoral Total Factor Productivity (TFP) estimates for the United States between 1899 and 1941 through better coverage of sectors and better-measured labor quality, and find TFPgrowth was lower than previously thought, broadly based across sectors, and strongly variant intertemporally. We then test and reject three prominent claims. First, the 1930s did not have the highest TFP-growth of the twentieth century. Second, TFP-growth was not predominantly caused by four ‘great inventions’. Third, TFPgrowth was not driven indirectly by spillovers from great inventions such as electricity. Instead, the creativedestruction-friendly American innovation system was the main productivity driver

Suggested Citation

  • Bakker, Gerben & Crafts, Nicholas & Woltjer, Pieter, 2017. "The sources of growth in a technologically progressive economy: the United States, 1899-1941," Economic History Working Papers 85081, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:85081
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    References listed on IDEAS

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    1. Robert J. Gordon, 2016. "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War," Economics Books, Princeton University Press, edition 1, number 10544, March.
    2. Thomas Philippon, 2015. "Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation," American Economic Review, American Economic Association, vol. 105(4), pages 1408-1438, April.
    3. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1, March.
    4. Jacob Martin Gould, 1946. "Output and Productivity in the Electric and Gas Utilities, 1899-1942," NBER Books, National Bureau of Economic Research, Inc, number goul46-1, March.
    5. Claudia Goldin & Lawrence F. Katz, 1999. "The Returns to Skill in the United States across the Twentieth Century," NBER Working Papers 7126, National Bureau of Economic Research, Inc.
    6. Simon Kuznets & Elizabeth Jenks, 1961. "Capital in the American Economy: Its Formation and Financing," NBER Books, National Bureau of Economic Research, Inc, number kuzn61-1, March.
    7. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 1-34.
    8. repec:hrv:faseco:30703979 is not listed on IDEAS
    9. Bakker, Gerben, 2012. "How Motion Pictures Industrialized Entertainment," The Journal of Economic History, Cambridge University Press, vol. 72(4), pages 1036-1063, December.
    10. Simon Kuznets & Lillian Epstein & Elizabeth Jenks, 1946. "National Income and Its Composition, 1919-1938, Volume II," NBER Books, National Bureau of Economic Research, Inc, number kuzn41-3, April.
    11. Simon Kuznets & Elizabeth Jenks, 1961. "Appendices and Index, "Capital in the American Economy: Its Formation and Financing"," NBER Chapters, in: Capital in the American Economy: Its Formation and Financing, pages 465-664, National Bureau of Economic Research, Inc.
    12. Alexander J. Field, 2003. "The Most Technologically Progressive Decade of the Century," American Economic Review, American Economic Association, vol. 93(4), pages 1399-1413, September.
    13. Simon Kuznets & Elizabeth Jenks, 1961. "Introduction to "Capital in the American Economy: Its Formation and Financing"," NBER Chapters, in: Capital in the American Economy: Its Formation and Financing, pages 3-14, National Bureau of Economic Research, Inc.
    14. Zvi Griliches, 1963. "The Sources of Measured Productivity Growth: United States Agriculture, 1940-60," Journal of Political Economy, University of Chicago Press, vol. 71, pages 331-331.
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    Cited by:

    1. Crafts, Nicholas, 2019. "The Sources of British Economic Growth since the Industrial Revolution : Not the Same Old Story," The Warwick Economics Research Paper Series (TWERPS) 1216, University of Warwick, Department of Economics.

    More about this item

    Keywords

    productivity growth; total factor productivity; great inventions; spillovers; United States — history;

    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-
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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