Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2007/6: In Defense of Electricity as a General Purpose Technology

Astrid Kander (), Kerstin Enflo () and Lennart Schön ()
Additional contact information
Astrid Kander: CIRCLE, Lund University, Postal: PO Box 117, Sölvegatan 16 , SE-22100 Lund, Sweden
Kerstin Enflo: Lund University, Postal: Sweden
Lennart Schön: CIRCLE, Lund University, Postal: PO Box 117, Sölvegatan 16 , SE-22100 Lund, Sweden

Abstract: Electricity has been regarded as a typical example of a general purpose technology and important for the surge both in energy productivity and overall productivity in the American economy in the 1920s. This view was challenged by Nicholas and Moser (2004) based on patent statistics. We argue that other methods are required for studying productivity effects and propose cointegration analyses. Wedemonstrate a clear impact from electrification on energy productivity in those broad Swedish industrial branches that used electricity for multiple uses. This effect goes beyond mere book-keeping effects and indicates the existence of dynamic effects.

Keywords: electricity; GPT; productivity; cointegration; dynamic effects

JEL-codes: O30

30 pages, December 1, 2007

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200706_Kander_et_al.pdf PDF-file 

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