ABSTRACT

THE CONCEPT OF total productivity and the notion that labor is not the only factor of production, that other factors such as capital and land should also be taken into account in a wealth of the nation calculation or a measure of its productivity, were discussed repeatedly in the literature of the 1930s. Two major strands of research came together, ultimately, in what was to become total factor productivity measurement and growth “accounting”: The first developed out of the national income measurement tradition, based largely on the work of NBER and what was later to become the BEA. 1 The second was influenced by Paul Douglas’s work on production functions. His work had been largely cross-sectional, but as time series data became available it was an obvious generalization to add trend-like terms to the function and allow it to shift over time. 2 This research tradition had a more econometric background and did not accept, necessarily, the various compromises and assumptions embedded in the national income accounts. It found a fertile soil in agricultural economics, spurred by the presence and teaching of Tintner at Iowa State University (Tintner 1944) and the later work of Earl Heady (see Heady and John Dillon 1961, ch. 1, for an early review of this literature). The two traditions came together in the work of Solow (1957), in some of my own early papers (Griliches 1960 and 1963), and especially in Dale Jorgenson and Griliches (1967). But they have also kept drifting apart.