The Equipment Hypothesis and U.S. Economic Growth
25 Pages Posted: 22 Feb 2008 Last revised: 27 Oct 2009
In several articles published in the 1990s, de Long and Summers argued that investment in producer durables had a high propensity to generate externalities in using industries, resulting in a systematic and substantial divergence between its social and private return. They maintained, moreover, that this was not the case for structures investment. Together, these claims constitute the equipment hypothesis. This paper explores the degree to which the history of U.S. economic growth in the twentieth century supports it.
Keywords: Economic history, Economic growth, Productivity, Equipment investment
JEL Classification: D24, N12, O11, O47
Suggested Citation: Suggested Citation