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Hence, what is called the "Solow Residual" - the g(A) term in the growth equation given earlier, is enormous. One of the first reactions was to argue that by reducing much of that influence to pure capital improvements, capital-intensity seem to play a larger role than imagined in these 1957 calculations - Solow does go on to argue, for instance, that increased capital-intensive investment embodies new machinery and new ideas as well as increased learning for even further economic progress (Solow, 1960).
However, Nicholas Kaldor was really the first post-war theorist to consider endogenous technical change...
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Common topics in this essay:
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