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Economic growth and technology
variables are organized in the following categories to facilitate analyses. Economic growth theory predicts that economic output is a
function of capital and labor
inputs, and that this function is influenced by advances in technology.
Economic Output
Economic output is the total
annual produce of the economic system. The
concept of the wealth of nations being annual produce annually distributed
originated with Adam
Smith in 1776. The
following data can be used as measures of economic output.
Capital
Capital stock is a primary
input variable, but it is published at the national level only.
State-level data must be derived from national data.
Several methods exist to derive regional series.
Alicia Munnell (2000) obtained her series by
allocating a share of the national capital stock total to each state based on
actual state public investment data and the share of each state’s involvement
in specific types of economic activity (i.e. agriculture, manufacturing, and
non-manufacturing). Gary
Garofalo (2001) apportioned the national capital stock estimates to
states by using annual income data, breaking the distribution of capital shares
down to the 2-digit standard industrial codes level (i.e. farming and
agricultural services, mining, construction, manufacturing, transportation,
wholesale and retail trade, finance/insurance/real estate, and services). The following capital stock series is derived using the
Garofalo method. The series
correlates at .90 with Munnell’s capital stock series.
Labor
Economic output is regulated
by the judgment and skill of labor. Labor
variables include measures of total full time and part time employment and
population. Some data that are most
relevant for technology-based economic development (e.g. scientists and
engineers in the workforce) are only available since 1993, while other series
(labor force age 16 and older, employee and unemployed) are available in 25-year
series. The following data can be
used as measures of labor input.
Technology
Technology has been referred
to as technological advances, advances in knowledge, innovation, intellectual
capital, and technological change. A
simple and useful definition of technology as “instructions to combine raw
materials” was provided by Paul
Romer (1990). Research and
development (R&D) expenditures correspond to the level of resources invested
in capital and labor required to support the research activities that may result
in patented or licensed technology. R&D
expenditures and patent counts are indeed highly correlated at the state level,
.87 in prior analyses(Stabler,
2002). The following data
can be used as measures of technology.
Author References Adam Smith in 1776
Smith, A. 1937. "The Wealth of Nations." New York: Random House. First published in 1776. Alicia Munnel (1990)
Munnell, A.H. (1990). Why has productivity growth declined? Productivity and public investment. New England Economic Review, January/February, 1-22. Gary Garofalo (2001)
Garofalo, G. and Yamarik, S. (2001). Regional convergence: Evidence from a new state-by-state capital stock series. (JEL Category: O47,R11). Department of Economics, The University of Akron, OH. Paul Romer (1990)
Romer, P.M. (1990). Endogenous technological change. The Journal of Political Economy, 98, (5), Part 2: The Problem of Development: A conference of the Institute for the Study of Free Enterprise Systems. S 71-S102. Lyn Stabler (2002)
Stabler, J.D. (2002). R&D policy and economic growth: factor, externality and silver bullet. (Unpublished dissertation). The University of Southern Mississippi.
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