Total factor productivity is often thought of as ldquo technology.rdquo However,
ID: 1217682 • Letter: T
Question
Total factor productivity is often thought of as ldquo technology.rdquo However, economic growth theory teaches us that productivity is the combination of ldquo technology rdquo and ldquo efficiency rdquo where the latter captures how effectively the factors of production (such as physical capital and labor) and technology are combined to produce output. We discussed several sources of productivity growth in steamboats and railroads during the antebellum period. To what extent were these sources improvements in ldquo technology rdquo and to what extent were they improvements in ldquo efficiency?rdquoExplanation / Answer
Following the Revolutionary War, business and political leaders recognized the need to further unify the country with roads. Local governments and private turnpike and railroad companies began building roads and canals. The War of 1812 and the rise of internal trade—between southern plantations and northern textile manufacturers—proved that the problem of internal transportation was far from solved and a federal system was needed, but various proposals to fund and build a national transportation system were deemed unconstitutional. The conservative Democratic Party in particular opposed federal funding of internal improvements. Instead, private companies proposed roads and canals, then enticed investors to provide fund building. In 1817, construction began on the Erie Canal to link Lake Erie and the Hudson River, inspiring a canal-building boom that lasted into the 1840s when railroads supplanted canals. Turnpike companies also experienced a boom—by 1830, more than 10,000 miles of turnpikes were operating in the east. Commissioners were authorized to collect tolls and were responsible for maintaining the stretch of road under their care.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.