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Technology and Economics (1991) / Chapter Skim
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Capital Formation and Economic Growth
Pages 47-56

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From page 50...
... Thus, it is actually possible to answer the question of how many units of labor in country B is equivalent to 1 unit of labor in country A at some given time t empirically. Using this approach, we are able to estimate the rates and patterns of scale economies and technical progress, as well as the relative contributions of the inputs to economic growth, without making the three conventional assumptions, mentioned above, maintained in growth accounting.
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From page 52...
... In the United States, where labor grew much more rapidly than in the other countries during this period, capital formation and technical progress still account directly for approximately 75 percent of economic growth. Our results may be contrasted with those of growth accounting exercises using more conventional methods.
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From page 53...
... The implications of this capital-augmenting type of technical progress are quite different from those of the conventionally assumed neutral variety, the effect of which does not depend on the size of the capital stock. CONCLUDING REMARKS We have discussed briefly our method for analyzing important characteristics of the nature of economic growth, such as the rates and pattern of technical progress and scale economies, simultaneously, using pooled time-series data from several industrialized countries.
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From page 55...
... 1962b. United States economic growth.
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Key Terms

  • production function
  • capital stock
  • constant returns
  • aggregate production
  • profit maximization

  • industrialized countries
  • capital formation
  • augmentation factors
  • real output
  • augmentation rate

  • scale economies
  • real aggregate
  • production functions
  • account directly
  • standardized units

  • exponential augmentation
  • competitive markets
  • west germany
  • stock relative
  • aggregate output

  • productivity trends
  • relative contributions
  • decreasing returns
  • growth accounting
  • common production

  • rate parameter
  • augmentation level
  • conventional assumptions
  • sometimes referred
  • aggregate national


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