SIEPR Policy paper No. 01-005
Two Centuries of American Macroeconomic Growth
Moses Abramovitz and Paul A. David
August 2001

This monograph is concerned with the nature of the process of macroeconomic growth that has characterized the U. S. experience, and manifested itself in the changing pace and sources of the continuing rise real output per capita over the course of the past two hundred years. A key observation that emerges from the long-term quantitative economic record is that the proximate sources of increases in real GDP per head in the century between 1889 and 1999 were quite different from those which obtained during the first hundred years of American national experience. Baldly put, the economy's ascent to a position of twentieth century global industrial leadership entailed a transition from growth based upon the interdependent development and extensive exploitation of its natural resources and the substitution of tangible capital for labor, towards a the maintenance of an productivity leadership through rising rates of intangible investment in the formation and exploitation of technological and organizational knowledge. The study's scope is indicated by the following:

Acknowledgements and Explanatory Note

TABLE OF CONTENTS

Prologue: Focus, Method and Structure

Part One: The Growth of the American Economy Since 1800: A Statistical Profile
  1. Problems of Measurement
  2. Output, Population and Output per Capita
  3. The Changing Contribution of Labor Input per Capita
  4. Labor Productivity Growth and Its Sources
  5. What Measured Growth Fails to Measure
  6. A Provisional Summary
Part Two: The U.S. Economy’s Shifting Growth-Path: An Interpretation

  1. A Narrative Overview
  2. Interpreting the Macroeconomic Record
    1. 2.1 The Critical Role of Technological Progress and Its Changing Direction
    2. 2.2 The Shifting “Bias” of Technological Progress and the Residual's Rise
    3. 2.3 The Rise of Intangible Capital Inputs: Underlying Forces and Implications
    4. 2.4 Private Sector Savings Behavior: Adaptive Response or Binding Constraint?
  3. The Productivity Slowdown: A Search for Explanation
    1. What the Growth Accounts Reveal
    2. Is the Slowdown an Artifact of Mismeasurement?
    3. Seeking Real Causes
    4. Summing Up: A Persisting Puzzle
  4. After the Slowdown, A “New Economy”?
    1. Towards understanding the productivity growth revival of the 1990's
    2. General Purpose Technologies and Productivity Surges, a Backward Glance
    3. Reflections on the Future: From ICT Productivity Growth Paradoxes to Payoffs
Part Three: American Growth in an International Perspective

  1. The Theory of Catch-up and Convergence versus the Record of Growth
  2. The Elements of Catch-up Potential and Its Realization
  3. Bases of the Postwar Potential for Catch-up and Convergence
  4. Conditions Promoting the Realization of Potential: The Past and the Future
Afterword: The U.S. Historical Experience and Growth Theory, Old and New

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