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Springer 2005De Economist (2005) 153:227239
DOI 10.1007/s10645-005-2936-1DE ECONOMIST 153, NO. 2, 2005BOOK REVIEWSRobert J. Gordon, Productivity Growth, Ination, and Unemployment, The Collected Essays of Robert J. Gordon, Cambridge
University Press, Cambridge, 2004. pp. IXII, 1-504. USD 48
(ISBN 0 521 53142 X)This collection of 17 essays contains ve newly written introductions and three previously unpublished papers on technology and productivity that gain new relevance
in todays economy. The collection includes papers from lesser-known sources rather
than Gordons well-known articles in journals like the American Economic Review,
the Journal of Political Economy and the Journal of Economic Literature.The book is divided into four parts. Why was American economic growth faster
between 1913 and 1972 than before or after? What caused productivity growth to
slow down after 1972? In Gordons view the driving forces of twentieth-century
growth were the great inventions of the late nineteenth century, especially electricity and the internal combustion engine. The central theme of Part 1 is the role
of these inventions in creating faster growth between 1913 and 1972 in the US.
Along the way, Part 1 asks whether the new internet economy of the late 1990s
measures up to the great inventions. Part 2 asks why productivity growth uctuates
over shorter intervals of a decade or so. Part 3 examines the theoretical relationship between output, ination, and unemployment. Then Part 4 provides empirical
evidence to support the theories from Part 3.In his foreword to the book, Robert Solow points at Gordons implicit view that
macroeconomics is a fundamentally pragmatic branch of economics, closely tied to
everyday observation. Gordon describes himself as an empirical macroeconomist. It
is interesting to learn how Gordons ideas and papers emerged. His career developed along two parallel tracks. At Oxford, in the early 1960s, Gordon was exposed
to Edward Denisons seminal 1962 study of the sources of economic growth. As
a graduate student at MIT in 1965, puzzles in the then newly developed macro
data on the history of US growth led to Gordons 1967 Ph.D. dissertation and to
his interest in measurement errors of all types. He discovered that the US government had paid for plant and equipment investment during World War II, which had
never been included in the capital input of the private sector. This...