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Technological progress: a proposed measure

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The paper suggests a direct measure of technological progress that can be quantified with reasonable confidence on the basis of historical data. The proposed measure is the effiency with which resources (mainly energy sources) are converted into final services. It decomposesinto two components namely the the thermodynamic efficiency of converting an energy source into mechanical work and the efficiency with which mechanical work is used to produce final services. The first part of this can be estimated by sector with fair accuracy. The second part can only be estimatd with reasonable accuracy in a few cases (such as transportation and illumination) but the results are sufficinet to permit some plausible extrapolation. The proposed measure is of interest in itself. But perhaps it is more important insofar as it suggests a way to construct an economic production function that explicitly reflects technological change rather than treating "technical progress" as an unexplained residual

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp1997/97-101.pdf

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Copyright INSEAD. All rights reserved