Real Business Cycles

Chapter 29The Discovery of the Residual: A Historical Note

Journal of Economic Literature

ZVI GRILICHES

National Bureau of Economic Research and Harvard University

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. ...