This link has been bookmarked by 3 people . It was first bookmarked on 22 May 2012, by mtaglier.
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23 Jul 12
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23 Jun 12
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Typically, technical or technological progress isn’t explicitly defined by those invoking Solow, but people take it to mean new gadgets.
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<script type="text/javascript" language="javascript">placeAd2(commercialNode,'midarticleflex',false,'')</script>However, Solow meant something much broader. On the first page of “Technical Change and the Aggregate Production Function,” the second of his two major papers, he wrote: “I am using the phrase ‘technical change’ as a shorthand expression for any kind of shift in the production function. Thus slowdowns, speedups, improvements in the education of the labor force, and all sorts of things will appear as ‘technical change.’ ” But his willfully inclusive definition tends to be forgotten.
Solow was constructing a simple mathematical model of how economic growth takes place. On one side was output. On the other side was capital and labor. Classical economists going back to Adam Smith and David Ricardo had defined the “production function”—how much stuff you got out of the economy—in terms of capital and labor (as well as land). Solow’s point was that other factors besides capital, labor, and land were important. But he knew his limitations: He wasn’t clear on what those factors were. This is why he defined “technical change” as any kind of shift (the italics are his) in the production function. He wasn’t proving that technology was important, as economists in recent years have taken to saying he did. All Solow was saying is that the sources of economic growth are poorly understood.
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Take the case of STAR METRICS, an effort by the Obama administration to “document the outcomes of science investments to the public”. STAR METRICS uses things like counting patents or how often a scientific paper has been cited to measure “the impact of federal science investment on scientific knowledge.” It’s easy to measure how many times a scientific paper has been cited. But make this of major bureaucratic importance, and you’ll get researchers citing things for the sake of citing them.
The notion that something is unquantifiable is alien to the mindset of the modern economist. Tell them it’s not quantifiable, and they will hear that it has not been quantified yet. This mistake matters, because economists and their business-school colleagues are very influential in the formulation of public policy. If economists rather than biologists decide what is good biology through supposedly quantitative, objective evaluations, you get worse biology. If economists decide what makes good physics, or good chemistry, you get worse physics, and worse chemistry. If you believe, as I do, that scientific progress, broadly speaking, is good for society, then making economists the arbiters of what is and isn’t useful ends up hurting everybody.
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22 May 12
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