2.2 The effect of technology on productivity

In each industrial revolution, new inventions radically changed the way that production and distribution were organised, and often led to large and rapid increases in the efficiency of production. The rise of electricity, for example, allowed US productivity to increase in the manufacturing sector (as opposed to the agricultural or service sector) by more than 5 per cent per annum throughout the 1920s.

Let us pause a moment and consider what this means. The term productivity refe
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