[PEN-L:2739] Re: Re: Re: 2 questions

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Peter, no.  It was capital deepening, but the productivity indexes are based
on dollars.  Since output prices were plummeting, total factor productivity
looked weak.

Peter Dorman wrote:

> I'm not an economic historian, but isn't this period seen, from today's
> perspective, primarily as one of capital widening versus deepening?  If
> so, many technical improvements would be embodied in new capital and
> would not show up in total factor productivity increases.  (That is, TFP
> goes up when superior new vintages of capital replace old, but not when
> Q/L rises as capital-intensive technologies are introduced for the first
> time--right?)
>
> Peter Dorman
>
> On Sat, January 30, 1999 at 19:05:13 (-0800) Michael Perelman writes:
> > I was just reading an article by Robert Gordon about the low total
> > factor productivity growth during the late 19th C.  I know that this was
> > a period of rapid technical change.  I suspect that the low productivity
> > growth was an artifact reflecting the highly competitive conditions at
> > the time.
> >
> > 1. Does anybody know of any work in considering the effect of
> > competitive conditions on measured productivity?

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx