Topic > The Effect of the Steam Engine on Output Growth - 710

To determine whether total factor productivity is an accurate measure it is important to look at another economist who uses a different empirical method. Antras and Voth (2003) explore the slow growth in total factor productivity between 1750 and 1850 in Britain (p.53). This is similar to Craft (2004a) and Craft (2004b) as they found that total factor productivity is slow during this period. However, there is a downside to the time frame they focus on. Similar to Craft (2004a), they examine the period in which the steam engine did not have the greatest impact on total factor productivity. However, the research will still provide a broad overview of its impact and may suggest that the steam engine had a greater impact than that found by Craft (2004a). Unlike Craft (2004a) and Craft (2004b), Antras and Voth use a dual method to discover independent estimates of TFP growth during the British Industrial Revolution (p. 55). Their dual method is based on the observation of factor prices. They decide to consider the prices of factors of production since they will tend to increase when productivity increases (p. 57). One downside to their experiment is that they make a couple of assumptions. The assumption they make in order to use their equation is that there was perfect competition and constant returns to scale (p.57). AND