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The Journal of ProductivityAnalysis, 2, 67-83 (1990)
© 1991KluwerAcademicPublishers,Boston. Manufacturedin the Netherlands.
Energy Use, Technical Progress and Productivity
Growth: A Survey of Economic Issues*
ERNST R. BERNDT
Massachusetts Institute of Technology, Alfred P. SIoan School of Management, 50 Memorial Drive,
E52-452, Cambridge, MA 02139
Abstract
In thispaper I surveyand interpretseveralof the mostimportantaspectsunderlyingrelationshipsamongtechnical
progress, productivitygrowth, and energyuse, viewedfrom the vantageof an economist.The first portion of
the paper providesa noneconomistwith a nontechnicalsummaryof the economictheory of cost andproduction,
and defines single-factorand multi-factorproductivitygrowth. In the secondhalf of the paper, four examples
are presentedthat highlightthe specialrole of energyconsumptionin inducingandreflectingthe effectsof technical
progress and productivitygrowth. A commontheme in the four examplesis that the concepts of embodiment,
diffusionand learning are critical to understandingthe forces linkingenergyusage, technicalprogress and pro-
ductivitygrowth.
1. I n t r o d u c t i o n
The relationships among technical progress, productivity growth and energy use are not
only extremely important, but they are also exceedingly complex. It is not surprising, there-
fore, that these interactions can be viewed insightfully from a number of differing vantages.
In this article I survey the existing literature, as viewed by an economist.
The outline I follow is as follows. The first half of the article surveys the general economic
literature linking technical progress to realized gains in productivity growth. The second
half of the survey focuses in particular on the important role of energy in linking
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