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Over the postwar period, many industrialized countries have experienced significant medium-frequency oscillations between periods of robust growth versus relative stagnation. Conventional business cycle filters, however, tend to sweep these oscillations into the trend. In this paper we explore whether they may, instead, reflect a persistent response of economic activity to the high-frequency fluctuations normally associated with the cycle. We define as the medium-term cycle the sum of the high and medium-frequency variation in the data, and then show that these kinds of fluctuations are substantially more volatile and persistent than are the conventional measures. These fluctuations, further, feature significant procyclical movements in both embodied and disembodied technological change, and research and development (R&D), as well as the efficiency and intensity of resource utilization. We then develop a model of medium-term business cycles. A virtue of the framework is that, in addition to offering a unified approach to explaining the high- and medium-frequency variation in the data, it fully endogenizes the movements in productivity that appear central to the persistence of these fluctuations. For comparison, we also explore how well an exogenous productivity model can explain the facts. (JEL E3, O3). [ABSTRACT FROM AUTHOR]

The article comments on several papers published in the May 1980 issue of the periodical "The American Economic Review" about gaps in economic research relating to market and policy determinants. The contributions of economic research in assessing the relationships among research and development, technological innovation, productivity growth and industrial development are examined in detail. One of the article finds that economists have made an important contribution to the understanding of the degree to which research and development from various sources and under different circumstances contribute to productivity growth, economic consequences of regulation, influence of research and development on technological advance. They have demonstrated that research and development contribute importantly to both technological innovation and productivity growth. Another article expresses concerns relating to economic consequences of regulation focus on fears of regulation altering the rate and direction of industrial technological advance.

The article focuses on the effects of industrial and technological developments upon the demand for capital. This segment comprises transportation and other public utilities and its nonparticipation in the investment decisions making for durable goods activity has been one of the major troubles of the economy. It would be difficult for a bureaucracy to survive save in a monopoly. Probably conditions are most fruitful for the sprouting of a bureaucracy as a corporation or industry approaches maturity. Seniority customs then have become well developed and the record of operations of sufficient long standing to justify the entrance of conservative money, savings institution money, bond money. Representatives of this money on the board of directors may serve to hamper an aggressive investment policy. The railroads may be the prime example of a mature industry of monopolistic status, in which conditions have been favorable to bureaucratic growth.

The process whereby innovations diffuse throughout an economy or throughout the world has interested many people at many times. One of the more intriguing examples of this process is the spread of the use of coke to make pig iron, which has interested investigators because of two seemingly incompatible properties. The use of coke in the blast furnace was one of the enabling innovations of the industrial revolution in Britain, and it played a similarly important role in the industrialization of many, if not all, other industrializing countries in the nineteenth century. Despite this importance, however, the spread of coke was not rapid, there was often a delay of as much as a half a century in the spread of this innovation from Britain to other countries. This article is based on economist Louis C. Hunter's masterful analysis and suggest some alterations in his hypothesis about the antebellum iron industry. This discussion has been concerned with changes in the production of pig iron and has discussed that part of the iron industry that made this material.

This paper concentrates on the role of the industrial sector. The growth of industrial employment opportunities and output depends mainly on the strength of two forces, capital accumulation and technological change. The greater the rate of capital accumulation, the greater the rate of expansion of industrial employment and output. Moreover, in an economy with substantial surplus labor, innovations can also make significant contributions in the same directions, especially if they are sufficiently strong and are biased in the labor using direction thus making possible maximum use of the relatively abundant factor. If the combined forces of capital accumulation and innovation yield a rate of labor reallocation in excess of the rate of population growth, the economy may be considered to be successful in the development effort in the sense that the center of gravity is continuously shifted towards the industrial sector. As this process continues, the underdeveloped economy will sooner or later exhaust its surplus labor and reach a significant turning point in the development process. The aim of this paper is to examine carefully the role of industrial capital accumulation and technological change during the development process.

Early industrial development in Soviet Union means its development during the period of the first two Five Year Plans-is commonly acknowledged to have been extremely rapid by international standards. As such, it inevitably exerts a strong attraction on the governments of underdeveloped nations. There is a natural interest in seeing what lessons can be learned from it. This paper concentrates on one such lesson. In trying to explain this rapid rate of development, three different lines of explanation have been pushed by various Western scholars. The main explanation given is the high proportion of national income set aside for investment, and the fact that such investment was directed primarily into the expansion of directly-productive rather than social capital. This investment was accompanied by a large influx of labor into industry and construction, since this labor force was more pushed out of agriculture than pulled into industry, such relocation of human resources did not interfere with a program of restricting consumption to the advantage of investment.

The industrialization's three-fold impact on a pre-industrial labor force is summarized below. People are forced to adjust to a new environment i.e. a city. This necessarily involves social disorganization which manifests itself, at the social level, in higher rates of crime, unbalanced sex ratios, political extremism and the like. These maladjustments require some centrally implemented policy if they are to be overcome. People must adjust to a new technology. This is the least difficult of the three adjustments and requires mainly an increase in the number of vocational training facilities. People must submit to new social relationships, particularly those required by factory organization. The absence of alternative social arrangements to provide such foundations for industrial communities quickly strikes one even in such a relatively advanced country as India. There would be great difficulties in execution, in potential and real abuses, in stimulating employer concern for such behavior and possibly in straining scarce capital resources.

The article presents a critical discussion by the author on two papers by Irving H. Seigel and W. Rupert Maclaurin about technological progress and it measurement. The author warns the reader about Maclaurin's potentially dangerous assertion that technological progressiveness cannot be correlated directly with monopoly or bigness. Maclaurin concedes that some degree of monopoly is essential to technological progress. Maclaurin's paper is a signal contribution to the study of innovation in selected industries. It is a commendable venture into an essentially unexplored field. The author's main criticism of the paper is its de-emphasis of policy considerations. In microeconomics there has been in the past, too much emphasis on price competition, for in the absence of technological change there are very, very narrow numerical limits to price reduction by the firms. By contrast, as a consequence of process innovation, the reduction of unit cost and price may be numerically very large indeed.

The article analyses the role of large corporations in insuring a steady and rapid technological growth. Progress is defined here as the introduction of important new or improved products or progresses. The author starts with certain assumptions concerning the technological progressiveness of the industries under consideration. He remarks that it must be understood that until American industries themselves become more self-conscious about the question of how technologically progressive they are and set out seriously to assemble information from their performance to explain their record, a theorist shall have to do the best he can with inadequate data. Measuring technological progress depends on what we are interested in and what we hope to accomplish. The aspect of technological progress that the author explores is that which leads to the opening of major new investment outlets. According to this definition, therefore, an industry is not likely to show a high rate of technological progress if its research and engineering are directed primarily to refinements in existing products rather than to radical improvements or the creation of entirely new products or processes.