Modern Economic Growth: Rate, Structure and Spread. The estimates for the Communist countries have been adjusted to conform to the international GDP concept. Surprisingly, the association between savings rates and the growth rates of nations was highly variable, which led Kuznets to conclude that the intensity of capital utilization was more important than sheer accumulation. Such a framework is not easily or rapidly attained, as evidenced by the long struggles toward it even in some of the presently developed countries in the nineteenth and early twentieth centuries. First and most obvious are the high rates of growth of per capita product and of population in the developed countries – both large multiples of the previous rates observable in these countries and of those in the rest of the world, at least until the recent decade or two.3 Second, the rate of rise in productivity, i.e. As already noted, the conventional measures of national product and its components do not reflect many costs of adjustment in the economic and social structures to the channeling of major technological innovations; and, indeed, also omit some positive returns. of output per unit of all inputs, is high, even when we include among inputs other factors in addition to labor, the major productive factor – and here too the rate is a large multiple of the rate in the past.4 Third, the rate of structural transformation of the economy is high. United Kingdom. The sketch above draws upon the results of many and widely varied studies in many countries, most of them economically developed; and the discussion reflects a wide collective effort, however individual some of my interpretations may be. It also reported that inequality of income distribution had narrowed over time, but this narrowing had not generally occurred until after World War I. Noté /5: Achetez Modern Economic Growth de Kuznets, Simon: ISBN: 9780300006469 sur amazon.fr, des millions de livres livrés chez vous en 1 jour Lecture to the memory of Alfred Nobel, December 11, 1971. This he found at the Social Science Research Council (SSRC) with funding supplied by the Rockefeller Foundation. Thus, concurrent with the remarkable positive achievements of modern economic growth are unexpected negative results even within the developed countries; while the less developed countries are struggling in the attempt to use the large potential of modern technology in order to assume an adequate role in the one and interdependent world (from which they cannot withdraw even if they wished to do so). The latter can only be conjectured, but reasonable estimates for Western Europe over the long period from the early Middle Ages to the mid-nineteenth century suggest that the modern rate of growth is about ten times as high for product per capita (see Simon Kuznets, Economic Growth of Nations: Total Output and Production Structure, Harvard University Press, Cambridge, Mass., 1971, pp. Emergence of a modern framework for economic growth may be especially difficult if it involves elements peculiar to European civilization for which substitutes are not easily found. Lecture to the memory of Alfred Nobel, December 11, 1971 (This abstract was borrowed from another version of this item.) https://review.chicagobooth.edu/magazine/summer-2013/simon-kuznets Nobel Media AB 2020. Twelve laureates were awarded a Nobel Prize in 2020, for achievements that have conferred the greatest benefit to humankind. exploitable by more developed nations, that yields a large and increasing rent. The major breakthroughs in the advance of human knowledge, those that constituted dominant sources of sustained growth over long periods and spread to a substantial part of the world, may be termed epochal innovations. The most distinctive feature of modern economic growth is the combination of a high rate of aggregate growth with disrupting effects and new “problems”. 3. Critical Review 5. The effects on conditions of life stem partly from the major role of technological innovations in modern economic growth, and partly from the rapid shifts in the underlying production structure. These included a book presenting estimates of US wealth, national product, and capital formation going back to 1880 and his supervision of a series of monographs dealing with long-term trends in capital formation in various sectors of the US economy. The demands of the data meant that his study of growth would be focused on the score or so of nations that had achieved high levels of industrialization by the mid-twentieth century. These are primarily from United Nations publications, supplemented by some auxiliary sources (mostly for the Communist countries), and use conventional conversion rates to U.S. dollars in 1965. The series Simon Kuznets, 1901-1985 Faculty members of the Economic Growth Center at Yale founded the Simon Kuznets Memorial Lecture Series in 1986. Urban life, with its denser population, provided amenities and spiritual goods that were not available in the “dull and brutish” life of the countryside; and the new skills, once learned, were often a more adequate basis for a richer life than the old. 8. Since economic engagement represents a dominant influence in the life of people, the shift in the share of a specific sector, with its distinctive characteristics and even mode of life, affects the population group engaged in it. This was certainly true of several major inventions associated with the Industrial Revolution in England, and illustrations abound of necessity as the mother of invention. Japan is the only nation outside of those rooted in European civilization that has joined the group of developed countries so far. The outward expansion of developed countries, with their European origin, goes back to long before modern economic growth, indeed, back to the Crusades. First, the group of less developed countries, particularly if we widen it (as we should) to include those with a per capita product somewhat larger than $120 (in 1965 prices), covers an extremely wide range in size, in the relation between population and natural resources, in major inherited institutions, and in the past impact upon them of the developed countries (coming as it did at different times and from different sources). 6. Since the latter reflects the realized effects of advancing technology, rapid changes in production structure are inevitable – given the differential impact of technological innovations on the several production sectors, the differing income elasticity of domestic demand for various consumer goods, and the changing comparative advantage in foreign trade. 18, no. Mitchell's unwillingness to have the bureau sponsor his project, which Burns later rejected out of hand, led Kuznets to seek other auspices. Does the acceleration in growth of product and productivity in many developed countries in the last two decades reflect a major change in the potential provided by science-oriented technology, or a major change in the capacity of societies to catch up with that potential? The earlier theory that underlies these measures defined the productive factors in a relatively narrow way, and left the rise in productivity as an unexplained gap, as a measure of our ignorance. 1. Nor did the numerous technological innovations, which drove the American economy and society forward and transformed American culture, escape notice. This study goes back to the beginning of our discipline, as indicated by the title of Adam Smith’s founding treatise, Wealth of Nations, which could as well have been called the Economic Growth of Nations. Other readers will always be interested in your opinion of the books you've read. One of his principal findings was that rich countries saved more than poor countries (both in cross section for recent years and over time). In a comprehensiv e analysis of th quan titative characteristics of économie growth, Mr. Kuznets illuminâtes the basic features of the modem économie epoch. Major aspects of structural change include the shift away from agriculture to non-agricultural pursuits and, recently, away from industry to services; a change in the scale of productive units, and a related shift from personal enterprise to impersonal organization of economic firms, with a corresponding change in the occupational status of labor.5 Shifts in several others aspects of economic structure could be added (in the structure of consumption, in the relative shares of domestic and foreign supplies, etc.). Modern Economic Growth Simon Kuznets. We have stressed the problem aspects of modern economic growth because they indicate the directions of further research in the field. File: PDF, 33.73 MB. But never before had he or any other scholar applied this analysis to so many countries over such a long stretch of time. First, as already suggested, such growth demands a stable, but flexible, political and social framework, capable of accommodating rapid structural change and resolving the conflicts that it generates, while encouraging the growth-promoting groups in society. These questions are clearly illustrative, but they hint at broader analytical problems suggested by the observation of modern economic growth as a distinct epoch. Although this process ground to a halt during the Great Depression of the 1930s, it resumed after the close of World War II. Europe, the Americas, and Oceania), relating to 1850-1960, as compared with 1000-1850, suggests a. multiple of 4 or 5 to 1 (see Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread, Yale University Press, New Haven, Corm., 1966, Tables 2.1 and 2.2, pp. I, Institut de Sociologic, Université Libre de Bruxelles, Brussels 1968, Tables D-4 and C-4). 2. 3 Dec 2020. Even with this narrow definition of less developed countries, the intermediate group was less than 0.7 billion, or less than 20 percent of world population.9 The preponderant population was thus divided between the very low and the rather high level of per capita economic performance. excluding small “city enclaves”), a drop of 30 to 40 percentage points in the course of a single century is a strikingly fast structural change. 51-75, particularly Table 9, p. 74; and Table 11, p. 93). However, during the first half of the twentieth century, the rate of growth of labor productivity among developed nations was generally much more rapid in the M and S sectors than in the A sector. All three components of the definition are important. Advancing technology is the permissive source of economic growth, but it is only a potential, a necessary condition, in itself not sufficient. Kuznets's final task for the bureau was a monograph that integrated the various sectoral studies into an integrated overview of the marshaling of capital for economic growth: Capital in the American Economy. How to organize research into long-term trends of economic growth? Suggested Citation. tion data as adjusted in Simon Kuznets, Shares of Upper Groups in Income and Savings (New York, 1953), p. 220. 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