Lecture14_goldenage

Lecture14_goldenage - Lecture 14: Golden age of...

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1 Lecture 14: Golden age of productivity • Electricity as a “general purpose technology” for illumination and automation. Diffuses from 1900-1920. • Electricity increases TFP – but with a lag. Required complementary capital investments. • Analogy with computers today. “Computers are everywhere but in the productivity numbers.” Will computers increase TFP with a lag? Or are computers simply not that productivity enhancing? Electricity as “general purpose technology” “ The use of electricity is now so general that it is difficult to name any industry… to which this modern mechanism has not been applied…practically all the new factories or shops in the United States of any size…have electricity.” - US Census of Manufacturers, 1905 ELECTRICITY IS: • Power source for automation; illumination • Used in workplace and in homes
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2 E/H Diffusion of Factory Electric Power, 1899-1929 Assembly line technology and mass production • First truly “mass produced” product = automobile • Accomplished true interchangeability • Product for the masses: A few standard models. Designed to be affordable to middle class.
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3 (1) Used first assembly line technology Ford plant, c.1913 "The man who puts in a bolt does not put on the nut. The man who puts on the nut does not tighten it.“ – Henry Ford Attaching body to chassis Ford plant, c. 1913 “In Mass Production there are no ‘fitters.’”– Henry Ford
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4 (2) Produced for the masses
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This note was uploaded on 04/13/2009 for the course ECON 183 taught by Professor Boustan during the Winter '09 term at UCLA.

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Lecture14_goldenage - Lecture 14: Golden age of...

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