The production-side approach to estimating embodied technological change

Plutarchos Sakellaris and Daniel Wilson

No 2001-20, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We estimate the rate of embodied technological change directly from plant-level manufacturing data on current output and input choices along with histories on their vintages of equipment investment. Our estimates range between 8 and 17 percent for the typical U.S. manufacturing plant during the years 1972-1996. Any number in this range is substantially larger than is conventionally accepted with some important implications. First, the role of investment-specific technological change as an engine of growth is even larger than previously estimated. Second, existing producer durable price indices do not adequately account for quality change. As a result, measured capital stock growth is biased. Third, if accurate, the Hulten and Wykoff (1981) economic depreciation rates may primarily reflect obsolescence.

Keywords: Technology; Productivity (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-dev, nep-eff and nep-tid
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: The Production-Side Approach to Estimating Embodied Technological Change (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2001-20

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