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Growth accounting is a procedure used in economics to measure the contribution of different factors to economic growth and to indirectly compute the rate of technological progress, measured as a residual, in an economy. [1] Growth accounting decomposes the growth rate of an economy's total output into that which is due to increases in the ...
The level of technology is important to determine the economic growth. It is the technological process which keeps the economy moving. In the modern world, superior technologies, resources, geography, and history give rise to robust economies; and in a well-functioning, robust economy, economic excess naturally flows into greater use of technology.
Productivity-improving technologies date back to antiquity, with rather slow progress until the late Middle Ages. Important examples of early to medieval European technology include the water wheel, the horse collar, the spinning wheel, the three-field system (after 1500 the four-field system—see crop rotation) and the blast furnace.
Technology growth and efficiency are regarded as two of the biggest sub-sections of total factor productivity, the former possessing "special" inherent features such as positive externalities and non-rivals which enhance its position as a driver of economic growth. [citation needed]
Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth. The theory also focuses on positive externalities and spillover effects of a knowledge-based economy which will lead to economic development.
Technology plays a critical role in science, engineering, and everyday life. Technological advancements have led to significant changes in society. The earliest known technology is the stone tool , used during prehistory , followed by the control of fire —which in turn contributed to the growth of the human brain and the development of ...
The focus of evolutionary economics is on economic change, but as a driver of this technological change has been considered in the literature. [5] Joseph Schumpeter, in his classic Theory of Economic Development [6] placed the emphasis on non-economic forces as the driver for growth. The human actor, the entrepreneur is seen as the cause of ...
Innovation economists believe that what primarily drives economic growth in today's knowledge-based economy is not capital accumulation as neoclassical economics asserts, but innovative capacity spurred by appropriable knowledge and technological externalities. Economic growth in innovation economics is the end-product of: [5] [6]