Can General Purpose Technology Theory Explain Economic Growth? Electrical Power as a Case Study

55 Pages Posted: 3 Apr 2014

See all articles by Cristiano Andrea Ristuccia

Cristiano Andrea Ristuccia

University of Cambridge - Department of Applied Economics

Solomos Solomou

University of Cambridge, Faculty of Economics

Date Written: March 10, 2014

Abstract

Does the concept of General Purpose Technologies help explain periods of faster and slower productivity advance in economies? The paper develops a new comparative data set on the usage of electricity in the manufacturing sectors of the USA, Britain, France, Germany and Japan and proceeds to evaluate the hypothesis of a productivity bonus as postulated by many existing GPT models. Using the case of the diffusion of electrical power in the early twentieth century this paper shows that there was no generalized productivity boost from electrical power diffusion as postulated by many existing GPT models. The productivity gains from this GPT varied widely across economies and industries, suggesting that the power of GPTs to predict aggregate or sectoral growth is limited.

Keywords: general purpose technologies, economic growth, economic history, productivity, long swings

JEL Classification: N110, N120, N130, N140, N600, O400

Suggested Citation

Ristuccia, Cristiano Andrea and Solomou, Solomos, Can General Purpose Technology Theory Explain Economic Growth? Electrical Power as a Case Study (March 10, 2014). CESifo Working Paper Series No. 4683, Available at SSRN: https://ssrn.com/abstract=2419881 or http://dx.doi.org/10.2139/ssrn.2419881

Cristiano Andrea Ristuccia

University of Cambridge - Department of Applied Economics ( email )

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Cambridge CB3 9DE
United Kingdom
+44 1223 335285 (Phone)

Solomos Solomou (Contact Author)

University of Cambridge, Faculty of Economics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
+44 1223 335226 (Phone)
+44 1223 335475 (Fax)

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