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The US-UK productivity gap in the twentieth century: a race between technology and population

  • Banerjee, Rajabrata

Recent developments in endogenous growth models have enabled researchers to reconsider some key events such as the take-off of the United States in the twentieth century. This paper investigates the roles played by innovative activity and population growth on comparative total factor productivity (TFP) growth between the US and the UK in the period 1870–2009. The study finds that the comparative lead in the US TFP was a race between innovative activity on the one hand and population growth on the other. While the first factor influenced TFP growth positively, the latter created a growth drag. Moreover, the findings strongly support the Schumpeterian hypothesis, where innovative activity has permanent growth effects in the long run.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30889.

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Date of creation: 12 May 2011
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Handle: RePEc:pra:mprapa:30889
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  1. Ang, James & Madsen, Jakob, 2009. "Can Second-Generation Endogenous Growth Models Explain The Productivity Trends and Knowledge Production In the Asian Miracle Economies?," MPRA Paper 17543, University Library of Munich, Germany.
  2. Greasley, David & Oxley, Les, 2007. "Patenting, intellectual property rights and sectoral outputs in Industrial Revolution Britain, 1780-1851," Journal of Econometrics, Elsevier, vol. 139(2), pages 340-354, August.
  3. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Chapters, in: NBER Macroeconomics Annual 1993, Volume 8, pages 15-86 National Bureau of Economic Research, Inc.
  4. Jakob Madsen & James Ang & Rajabrata Banerjee, 2010. "Four centuries of British economic growth: the roles of technology and population," Journal of Economic Growth, Springer, vol. 15(4), pages 263-290, December.
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  9. Cervellati, Matteo & Sunde, Uwe, 2005. "Human capital formation, life expectancy, and the process of development," Munich Reprints in Economics 20083, University of Munich, Department of Economics.
  10. Madsen, Jakob B., 2007. "Are there diminishing returns to R&D?," Economics Letters, Elsevier, vol. 95(2), pages 161-166, May.
  11. Ang, James B. & McKibbin, Warwick J., 2007. "Financial liberalization, financial sector development and growth: Evidence from Malaysia," Journal of Development Economics, Elsevier, vol. 84(1), pages 215-233, September.
  12. Broadberry, Stephen N., 1993. "Manufacturing and the Convergence Hypothesis: What the Long-Run Data Show," The Journal of Economic History, Cambridge University Press, vol. 53(04), pages 772-795, December.
  13. Jakob Madsen, 2008. "Semi-endogenous versus Schumpeterian growth models: testing the knowledge production function using international data," Journal of Economic Growth, Springer, vol. 13(1), pages 1-26, March.
  14. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
  15. Peter L. Rousseau & Richard Sylla, 1999. "Emerging Financial Markets and Early U.S. Growth," NBER Working Papers 7448, National Bureau of Economic Research, Inc.
  16. Broadberry, Stephen N. & Irwin, Douglas A., 2006. "Labor productivity in the United States and the United Kingdom during the nineteenth century," Explorations in Economic History, Elsevier, vol. 43(2), pages 257-279, April.
  17. Les Oxley & David Greasley, 1998. "Vector autoregression, cointegration and causality: testing for causes of the British industrial revolution," Applied Economics, Taylor & Francis Journals, vol. 30(10), pages 1387-1397.
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  26. repec:fth:harver:1473 is not listed on IDEAS
  27. Broadberry, Stephen & Ghosal, Sayantan, 2005. "Technology, organisation and productivity performance in services: lessons from Britain and the United States since 1870," Structural Change and Economic Dynamics, Elsevier, vol. 16(4), pages 437-466, December.
  28. James B. Ang & Rajabrata Banerjee & Jakob B. Madsen, 2010. "Innovation, Technological Change And The British Agricultural Revolution," CAMA Working Papers 2010-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  29. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
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