A Brief History of Measuring Productivity

There are two book published in the early of 1970s, "Economic Growth" of Solow and "Economic growth of nations "of Kuznet. They marked the beginning of the professional consensus on the economy growth. In Kuznets' book, he summarized his empirical research for decades. Meanwhile Solow's book contained his summary theoretical research for decades. Kuznets empirical studies, Solow's theory Solow's neoclassical theory of the growth of economy, with his own analysis of the steady state with constant growth rates, provided economists conceptual sophistication and clarity. Kuznets meanwhile quantified the sweep of the USA's historical experience and thirteen other developed economies. Kuznets combined it with quantitative comparisons between developing and developed economies during the period of post-war. Same subject Because they did not know about the work of each other, they worked on their books independently without any connection between them. The proof of this is the absence of the cross-references on their work. But the strange thing is that they had worked on the same subject, within the same timeline and within the neighborhood of Cambridge, Massachusetts. After Kuznets was challenged by Denison, he recognized the approach of Denilson to measure labor input and then presented this version in 1971. Otherwise, Solow made extensive references for the findings of Denison in the growth of capital stock and output. However, the acceded to work hours (or "man-hours' - termed in 70s) as the a measure for labor input. Kuznets indicated "The contribution of factor input per capita was the small fraction on the rate of growth of per capita product". As the estimates in his book, the contribution of these increases of capital inputs per capita during this period was negative. In 1942, Tinbergen analyzed sources of the growth on U.S. economy a century ago. Tinbergen found that the efficiency accounted for just a little more than a quarter of output growth, while the growth of labor and capital input accounted for the rest. This was the opposite on the conclusion over 30 years later which Solow and Kuznets reached. Total factor productivity (TFP) The TFP (or efficiency) was independently introduced by Stigler and then became the beginning for many major research programs of Economic Research National Bureau. This program used the data on the output of the USA economy from previous studies conducted by this bureau including Kuznets' pioneering estimates of national product. However, most of the data had been generated by Kendrick using the explicit system of the national production accounts. They include measures of productivity, output and input for individual industries and national aggregates. The article of Solow "Aggregate Production Function and Technical changes" identified "Technical changes" with the changes in production function. As Abramovitz, Kuznets and Kendrick, Solow attributed most of the U.S.A. economic growth to "Residual" growth on productivity. Later, Kuznets reinforced findings of Kendrick, Abramovitz and Solow. He stated that the growth of economy was mainly due to the productivity (or "Solow residual") between growth of output as well as growth of labor and capital outputs.