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Factor Biases and Technical Change in Manufacturing: The American System, 1850–1919

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  • Cain, Louis P.
  • Paterson, Donald G.

Abstract

This paper examines the proposition that U.S. manufacturing experienced biased technical change during the period 1850–1919. Tests for bias, in Hicksian terms, are conducted using the translog cost dual. Redefined census data permit these tests to be made at the two-digit level of industry classification and with four inputs considered—labor, capital, materials, and a residual factor input. The tests demonstrate that labor-saving and capital-using biases existed, but material-using biases also were present. Furthermore, the patterns of bias varied considerably from industry to industry and often were of such a magnitude as to overpower ordinary substitution effects.

Suggested Citation

  • Cain, Louis P. & Paterson, Donald G., 1981. "Factor Biases and Technical Change in Manufacturing: The American System, 1850–1919," The Journal of Economic History, Cambridge University Press, vol. 41(2), pages 341-360, June.
  • Handle: RePEc:cup:jechis:v:41:y:1981:i:02:p:341-360_04
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    Cited by:

    1. Charles Calomiris, 1995. "The Costs of Rejecting Universal Banking: American Finance in the German Mirror, 1870-1914," NBER Chapters, in: Coordination and Information: Historical Perspectives on the Organization of Enterprise, pages 257-322, National Bureau of Economic Research, Inc.
    2. Khaled, Mohammed S, 2017. "Estimating bias of technical progress with a small dataset," Working Paper Series 20153, Victoria University of Wellington, School of Economics and Finance.
    3. Kris Inwood & Ian Keay, 2005. "Bigger establishments in thicker markets: can we explain early productivity differentials between Canada and the United States?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1327-1363, November.
    4. Scherer, Frederic Michael, 2010. "The Dynamics of Capitalism," Scholarly Articles 4454157, Harvard Kennedy School of Government.
    5. Chulhee Lee, 2009. "Technological Changes and Employment of Older Manufacturing Workers in Early Twentieth Century America," NBER Working Papers 14746, National Bureau of Economic Research, Inc.
    6. Ian Keay, 2003. "An Empty Promise: Average Cost Savings and Scale Economies among Canadian and American Manufacturers, 1910‐1988," Southern Economic Journal, John Wiley & Sons, vol. 70(2), pages 374-388, October.
    7. Braggion, Fabio & Moore, Lyndon, 2013. "The Economic Benefits of Political Connections in Late Victorian Britain," The Journal of Economic History, Cambridge University Press, vol. 73(1), pages 142-176, March.
    8. Paul A. David, 2005. "Two Centuries of American Macroeconomic Growth From Exploitation of Resource Abundance to Knowledge-Driven Development," Macroeconomics 0502021, University Library of Munich, Germany.

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