NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Generalized Solow-Neutral Technical Progress and Postwar Economic Growth

Michael J. Boskin, Lawrence J. Lau

NBER Working Paper No. 8023
Issued in December 2000
NBER Program(s):   EFG

Using revised, updated, and consistent annual post-World War II data from the G-7 countries developed by us, we econometrically estimate and test alternative explanations of the structure of economic growth in a model with three inputs tangible capital, labor, and human capital which permits the identification of the magnitudes of and biases in both returns to scale and technical progress. We find: 1. Technical progress is simultaneously purely tangible capital and human capital augmenting, that is, generalized Solow-neutral.' This finding provides an alternative explanation of the slow pace of convergence in real GDP per capita: the benefits from technical progress depend directly on the levels of tangible and human capital; countries with higher levels of capital realize higher rates of technical progress.2. Technical progress has been capital, not labor, saving and thus is not a cause of systemic structural unemployment. 3. Technical progress accounts for more than 50 percent of the economic growth of the G-7 countries except Canada. Tangible capital input is next most important; together with technical progress, they account for three quarters or more of the growth of real output in the G-7 countries, except Canada. 4. The most important source of the growth slowdown since the mid-1970's decline in the rate of capital (both tangible and human)-augmenting technical progress.

download in pdf format
   (259 K)

email paper

This paper is available as PDF (259 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8023

Users who downloaded this paper also downloaded these:
Acemoglu w7544 Labor- and Capital- Augmenting Technical Change
Holtz-Eakin w4144 Solow and the States: Capital Accumulation, Productivity and Economic Growth
Boskin and Lau w3521 Post-War Economic Growth in the Group-of-Five Countries: A New Analysis
Jorgenson Productivity and Economic Growth
Mankiw, Romer, and Weil w3541 A Contribution to the Empirics of Economic Growth
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us