ABSTRACT
Pessimists emphasize a weak productivity outlook associated with available technologies as well as those expected in the foreseeable future. The rapidly growing low-productivity health sector underscores how productivity growth may flail; some studies even show negative productivity in healthcare. Sluggish productivity in the health sector, given its size, adversely impacts the overall standard of living in the United States. Gordon’s work employs a paradigm consisting of three industrial revolutions driven primarily by clusters of technology. The first, beginning in the late 18th century, was led by steam power, cotton, and textile manufacture. The second began after the Civil War and was fueled by steel, electricity, elevators, chemicals and plastics, appliances, internal combustion engines, and air transport. Additional innovations at this critical stage included telephones, movies, radio, and television. Institutional change has been evolving and can be expected to curb the growth of health expenditures.
