Studies of early U.S. growth traditionally have emphasized real-sector explanations for an acceleration that by many accounts became detectable between 1815 and 1840. Interestingly, the establishment of the nation's basic financial structure predated by three decades the canals, railroads, and...

Using 114 years of U.S. stock market data we try to relate movements in stock prices to changes in technology. We find measures of technological progress explain 37% of the 3.9% annual growth in the stock market over the 1885-1998 period, the "Jazz-Age" (1918-1934) entrants were not overvalued,...

Investment of U.S. firms responds asymmetrically to Tobin's Q: Investment of established firms -- `intensive' investment -- reacts negatively to Q whereas investment of new firms -- `extensive' investment -- responds positively and elastically to Q. This asymmetry, we argue, reflects a...

This paper develops a set of criteria for identifying the arrival of a general purpose technology (GPT) and applies them to the electification and IT "revolutions" of the late 19th and early 20th centuries. The criteria suggest that a GPT should be 1) pervasive, 2) improving over time, and 3)...

We model Moore's Law as efficiency of computer producers that rises as a by-product of their experience. We find that (a) because computer prices fall much faster than the prices of electricity-driven and diesel-driven capital ever did, growth in the coming decades should be very fast, and that...

We model merger waves as reallocation waves, and argue that mergers spread new technology in a way that is similar to that of the entry and exit of firms. We focus on two periods: 1890-1930, during which electricity and the internal combustion engine spread through the U.S. economy, and...

We argue that a firm's organization capital depends on the state of technology when the firm was born and on the technologies that have followed. We estimate vintage effects on the value of firms from 114 years of stock market data. We find: 1) a surprisingly strong upward trend in the...

The IPOs of the Electricity/Internal Combustion revolution created more lasting value than the IPOs of the IT revolution. Stock-market data point to two explanations for this. First, computer prices have been falling much faster than did those of electricity and internal combustion in the...