Working Paper: NBER ID: w3903
Authors: J. Bradford De Long
Abstract: Over the past century the long-run growth of six economies shows a strong association between investment in machinery and economic growth that holds both within and across nations and periods. A similar strong association holds for the post-world War II period for a broader cross section of nations. A number of considerations suggest that this association is causal, and that a high rate of machinery investment is a necessary prerequisite for rapid long-run productivity growth - a hypothesis also supported by narratives from the history of technology.
Keywords: Productivity; Machinery Investment; Economic Growth
JEL Codes: O40; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high machinery investment (E22) | rapid economic growth (O53) |
| high machinery investment (E22) | productivity growth (O49) |
| economic growth (O49) | high machinery investment (E22) |