Geoscience Reference
In-Depth Information
GDP Index (1900=1)
25
20
US GDP
15
10
SOLOW RESIDUAL
(TFP)
5
Cobb - Douglas
1940
1960
1980
2000
1900
1920
year
Fig. 2.1 Explained share of the actual GDP growth of the United States economy during the 20th
century, and the Solow residual obtained by a conventional Cobb-Douglass production function.
Source Ayres et al. (
2009
) during 100 years of economic growth, presented to the Q2 session on
Energy, climate change and growth: perspectives from economic history of the 25th World
Economic History Congress, Utrecht, The Netherlands. The following three-factor Cobb-Douglas
production function has been used: Y
t
=A
t
(H
t
K
t
)
α
(G
t
L
t
)
ʲ
(F
t
R
t
)
ʳ
, where Y
t
is output at time t,a
function of K
t
, L
t
, R
t
as inputs of capital, labour and natural resources; A
t
is
“
total factor
productivity
”
or the
“
Solow residual
”
; H
t
, G
t
, F
t
are the coefcients of factor contribution taken
from its revenue share in the income distribution of GDP
in this case as 0.70 for L, 0.26 for K,
and 0.04 for the rest. According to the constant returns to scale assumption required by this
function,
—
α
+
ʲ
+
ʳ
=1
theories has attempted to overcome this
analytical cul-de-sac. Nevertheless, instead of reintroducing the material and energy
layers that embody and activate capital assets or enhance labour capacities, the
endogenous growth theorists came from a different angle.
5
They looked towards
increasingly symbolic and immaterial dimensions, such as the role played by
'
A second wave of
“
endogenous growth
”
endowment in long-term economic growth, and other social and
cultural aspects. This approach has inspired a wide range of interesting and valuable
historical research on the economic history of education, literacy and numeracy,
topic printing, skill premiums in the labour markets, the long-term effects of the
European Marriage Pattern characterized by late weddings resulting in independent
households based on a single nuclear family, and
human capital
'
in the
everyday life of a large fraction of people which, according to Robert Lucas
6
is
needed for income growth to occur in any society. These may range from nutri-
tional standards and height increases, to the rise of contractual arrangements on
weddings seen as a direct token of
“
a million of mutinies
”
'
girlpower
'
and an indirect indicator of the habit
to negotiate all sorts of business in life.
7
5
Ayres (
2001
).
6
Lucas (
2002
).
7
van Zanden (
2009
).
