Unlike incremental innovation, gpts can trigger an uneven growth trajectory, which starts with a. Inputoutput multipliers, general purpose technologies. The luddites of the early 19th century resisted and tried to destroy machines that rendered their weaving skills obsolete, even though the machines ushered in new skills and jobs. Gpts are seen as infrequent but pervasive exogenous technological shocks able to generate low frequency longterm positive effects on economic growth by transforming the productivity potential of economies jovanovic and rousseau, 2005. Inputoutput multipliers, general purpose technologies, and. This paper evaluates the diffusion of electricity within the context of a gpt perspective. Pdf general purpose technologies and economic growth. The global information technology report 2015 vii in 2001, the world economic forum and its partner insead recognized the need for a report such as the.
Bekar represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in brigham young university. Whole eras of technical progress and growth appear to be driven by a few general purpose technologies gpts, such as the steam engine, the electric motor, and semiconductors. Introduction artificial intelligence ai is fast becoming the most significant general purpose technology of our era. General purpose technologies and longterm economic growth. In a previous paper helpman and trajtenberg, 1994 we incorporated this notion into a grossmanhelpman growth model, and explored the economy. Ornellatarola august,2001 abstract the aims of this work is to investigate the relationship between endogenous growth and human capital.
We find evidence that the internet acts as a generalpurpose technology. The digital revolution should be accepted and improved rather than ignored and repressed. They establish an alternative to the standard growth models that use an aggregate production function and then introduce the concept. General purpose technologies, technological change, patents. Technological change and economic growth sciencedirect. Electricity diffusion in the manufacturing sector before wwii article pdf available april 2012 with 403 reads how we measure reads. Thus the steam engine and the electric motor may have.
With techniques like machine learning ml, we can now build systems that are capable of improving their. General purpose technologies and economic growth mit. Timothy bresnahan and manuel trajtenberg no 4148, nber working papers from national bureau of economic research, inc. General purpose technologies and economic growth edited by elhanan helpman. Unfortunately, this analysis has not yet been completed, so. The history of earlier generalpurpose technologies demonstrates that even with shortterm dislocations, reorganizing the economy around revolutionary technologies generates huge longterm benefits. Aug 03, 2014 growth that is driven by general purpose technologies is different from growth driven by incremental innovation. Insight report the global information technology report 2015. Economic transformations general purpose technologies and long term economic growth richard g. Chapter 9 globalisation, new technology and economic.
The goal of science and technology is to enable enterprises and individuals to use technologies more efficiently, as this results in reduced costs and enhanced productivity. Technologies like the steam engine, railroads, electricity and the internal combustion engine, and steel are all examples of general purpose technologies that drove economic transformation and growth in the past. General purpose technologies and economic growth the mit press. Department of economics working papers ftp directory listing. General purpose technologies and economic growth elhanan. The literature on general purpose technologies gpts contains one line of theorizing that has attempted to impose more structure by modeling technology in two tiers. No 4148, nber working papers from national bureau of economic research, inc abstract. Examples include the steam engine, railroad, interchangeable parts, electricity, electronics. This economic letter argues that the new normal pace for gdp growth, in real inflationadjusted terms, might plausibly fall in the range of 1. The decline of computers as a general purpose technology. What is the impact of mobile telephony on economic growth.
Introduction the last decade has been an extraordinarily good one for developing countries and their mostly poor citizensso good in fact that it has become commonplace to look upon them as potential saviors of the world economy. Gpts have the potential to drastically alter societies through their impact on preexisting economic and social structures. View enhanced pdf access article on wiley online library html view download pdf for offline viewing. General purpose technologies and economic growth, mit. His several textbooks have been translated into more than 15 foreign languages and he has written more than 180 articles and book chapters on theoretical and applied economics and policy. May 03, 2004 whole eras of technical progress and economic growth appear to be driven by a few key technologies, which we call general purpose technologies gpts. General purpose technologies and long term economic growth richard lipsey, kenneth carlaw and clifford bekar won the 2006 schumpeter prize for distinguished writing on evolutionary economics. Inputoutput analysis therefore potentially offers one way to quantify the impact of general purpose technologies. In a globalizing world economy, the reason for differences in economic growth and intercountry income inequality is explained on the grounds of technological differences. General purpose technologies, industrial competence and. Whole eras of technical progress and economic growth appear to be driven by a few key technologies, which we call general purpose technologies gpts. Growth that is driven by general purpose technologies is different from growth driven by incremental innovation. Human development, in combination with technology, yields economic growth which, in turn, is necessary to generate further advances in human development. The authors argue that long term economic growth is largely driven by pervasive technologies now known as general purpose gpts.
A gpt can be defined as a technology that initially has much scope for improvement and eventually comes to be widely used, to have many uses, and to have many hicksian and technological complementarities lipsey et al. A gpt can be defined as a technology that initially has much scope for improvement and evntually comes to be widely used, to have many uses, and to have many hicksian and technological complementarities. Examples of gpts are the steam engine, electricity, and the computer. We turn now to dynamic aspects of the performance of gpts, such as the role of informational flows between sectors and their implications for growth. Thus the steam engine and the electric motor may have played such a role in the past, whereas semiconductors and computers may be. Electricity diffusion in the manufacturing sector before wwii.
One of them is about general purpose technologies gpt, a theme that briefly rose to prominence a decade ago in the literature of the economics of technological change of which lipsey was one pioneer. In a previous paper helpman and trajtenberg, 1994 we incorporated this notion into a grossmanhelpman growth model, and explored the economywide dynamics that a gpt generates. The contributors to this volume are concerned with the type of drastic innovation called general purpose technologies gpts. A new view of general purpose technologies econstor. The history of earlier general purpose technologies demonstrates that even with shortterm dislocations, reorganizing the economy around revolutionary technologies generates huge longterm benefits. General purpose technologies and long term economic growth richard lipsey, kenneth carlaw and clifford bekar won the 2006. The past, present, and future of economic growth dani rodrik 1. Information technology it is an example of a general purpose technology that has the potential to play an important role in economic growth, as well as other dimensions of economic and social development. Steam, electricity, internal combustion, and information technology it are often classi. Endogenous growth and general purpose technologies. The impact of technology can be seen in advances in manufacturing where robots perform precision operations and in hospitals where robots are used to make medical procedures less invasive.
Studies of economic growth often refer to general purpose technology gpt. By their very nature, general purpose technological revolutions are also highly disruptive. There are really two channels to be considered here. Electricity diffusion in the manufacturing sector before wwii, cambridge working papers in economics 1048, faculty of economics, university of cambridge. General purpose technologies, economic growth, economic history, productivity, long swings.
General purpose technologies and economic growth faculty of. General purpose technologies and long term economic growth lipsey, richard g. The technology can be regarded as primary source in economic development and the various technological changes contribute significantly in the development of underdeveloped countries. General purpose technologies and economic growth the mit. Inputoutput multipliers, general purpose technologies, and economic development charles i. The term generalpurpose technology, or gpt, has seen extensive use in recent treat ments of the role of technology in economic growth, and is usually. Technology plays a significant role in fueling economic growth. Unlike economic development, which is the outcome of planned and resultoriented activities. No 11093, nber working papers from national bureau of economic research, inc abstract. Electricity diffusion in the manufacturing sector before. Can general purpose technology theory explain economic growth.
The starting point is represented by the following question. He was awarded the sshrc gold medal for distinguished lifetime achievement in 2005 and in 2011 he received one of the. The first runs from economic growth to human development and is fueled by household and government expenditures, heavily. General purpose technologies and economic growth mit press. This idea can also be found in 1991, in bresnahan david and trajtenberg 1995, in. Thus the steam engine and the electric motor may have played such a role in the past, whereas semiconductors and computers may be doing as much in our era. Economic growth enables an increase in the indicators like gdp, per capita income, etc. General purpose technologies and surges in productivity. The strategy encompasses both policy recommendations to make economic growth greener and a set of indicators to monitor progress towards green growth. Generalpurpose technologies gpts are technologies that can affect an entire economy. Part of the the new palgrave economics collection book series nphe. Innovation diffusion, general purpose technologies and. The second is the rise of the west and the beginning of sustained economic growth in europe in the eighteenth and nineteenth centuries.
The dynamics of general purpose technologies in previous sections we assumed a oneshot game, allowing us to discuss the two main externalities associated with gpts. The term generalpurpose technology, or gpt, has seen extensive use in recent treatments of the role of technology in economic growth, and is usually reserved for changes that transform both household life and the ways in which. Historical reflections on the future of the ict revolution in this essay we reflect on the relevance of early twentieth century american experience for understanding the more general phenomenon of recurring prolonged swings in the tfp growth rate in advanced industrial economies. The level of technology is also an important determinant of economic growth. The paper develops a new comparative data set on the usage of electricity in the manufacturing sectors of the us, britain, france, germany and japan and proceeds to evaluate the hypotheses of a productivity slowdown and of a productivity bonus as postulated by many existing gpt models. Seventeen contradictions and the end of capitalism. General purpose technologies gpts are technologies that can affect an entire economy usually at a national or global level. A key, neglected, aspect is the general purpose nature of the new information technologies. Technological advancement and economic growth are truly related to each other. A gpt has the potential to affect the entire economic system and can lead to farreaching changes in such social factors as working hours and constraints on family life. The recent changes in the us wage structure are often linked to the new wave of capitalembodied information technologies. On the other hand, economic development enables improvement in the life expectancy rate, infant mortality rate, literacy. In recent years there has been an upsurge of interest among growth economists in general purpose technologies gpts. The main thesis is that the common practice of basing the definition of growth on an omnibus and pseudoquantitative concept of aggre.
The impact of digital technology on society and economic. Advances in technology are improving batteries to create better performance in everything. Unlike incremental innovation, gpts can trigger an uneven growth trajectory, which starts with a prolonged slowdown followed by a fast acceleration. Growth based on general purpose technologies, nber working papers 4854, national bureau of economic research, inc. In this paper we use comprehensive firmlevel data from around the world to analyze the effect of access to telecom serviceswith particul ar attention to the interneton firm productivity and growth. Oct 11, 2016 economic growth during the recovery has been slower on average than its trend from before the great recession, prompting policymakers to ask if there is a new normal for u. The strategy is first and foremost about implementing change and achieving a common purpose. The contributors to this volume are concerned with the type of drastic innovation called general purpose technologies g. History and theory alike suggest that general purpose technologies gpts, such as the steam engine or electricity, may play a key role in economic growth. General purpose technologies and productivity surges. General purpose technology and wage inequality springerlink. The concept of economic growth the purpose of this paper is to clarify certain issues which are prominent in discussions of the concept of economic growth. On the other hand, the relationship between trade openness and sectoral unemployment, like the relationship between trade openness and sectoral wage inequality, can be nonmonotonic.
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