Economic Growth in Sweden, New Measurements

Almost 50 years ago Robert Solow324 started up a new era in growth measurement by publishing his article on economic growth and technological development in the US economy. He used the technique of Growth Accounting to break down growth in US labour productivity into components. His results indicated that almost all growth in the US economy was due to technological developments and very little to capital deepening. This inspired Zwi Griliches and Dave W. Jorgensen325 to try to improve the capital measurements. Another important contribution was made by Denison326 who tried to incorporate a measurement of the improvement in labour quality. This period of rapid development of the neoclassical growth theory and use of the Growth Accounting technique lost momentum due to researchers’ increasing interest in short term questions, a lack of adequate data and the fact that growth was treated as exogenous in the neoclassical word, so these theories could not explain growth in itself.