Comments on Daniel Sichel's Review Article on The Rise and Fall of American Growth

Abstract

Daniel Sichel's review focusses mainly on the future of innovation and technology. In contrast, my book is mainly about the past, and the reasons why the growth rate of total factor productivity in the years since 1970 has averaged only about one-third the rate registered between 1920 and 1970. My explanation is that a series of "Great Inventions" in the late 19th century, led by electricity and the internal combustion engine, utterly changed methods of production in the business economy and conditions of work on the job and at home. The digital revolution since 1960 has transformed business methods further and led to a temporary recovery of productivity growth between 1995 and 2004, but slow growth since 2004 suggests that the major impacts of the digital revolution are largely over, while technological transformations in the future will be evolutionary rather than revolutionary.

Keywords

• u.s. economy
• economic growth