This one is from American Prospect ("The Argument over Inequality"), and provides an interesting complement to the longer article in the previous post.
History, economics and sociology all rolled into one.
That's why I love studying this stuff.
Fair warning: As with most writing in the popular press, you have to take this as one side of a really complex issue. There are some interesting facts, stats and anecdotes presented by the author, but it would be a stretch to call it an objective empirical analysis.
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One thing that I think is interesting is the quote regarding the Solow model. It mentions that 88% of the growth has been accounted for in the tech coefficient. With that kind of growth, I wonder why the proportions of L and K haven't changed much? I would think that to fuel that kind of tech growth (although this includes many things) that one would end up adjusting the levels of labor productivity and capital productivity according to technology and the current type of economy (aka, the service economy that we are becoming).
ReplyDeleteI don't think the American economy really made the shift towards a service economy until at least the 1970s. The article says that 88% of growth between 1909 and 1947 could not be explained by changes in land, capital, or labor. So, during that period only like 12% of the growth in labor productivity could be attributed to increased capital per hour of work, and the rest was attributed to something else. According to the article, it was all attributable to technology, but some labor shifting, changes in economic policies, and cultural changes were probably involved too.
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