Measuring Our Ignorance, One Book at a Time: New Indicators of Technological Change, 1909-1949

We present new indicators of U.S. technological change for the period 1909-49 based on information in the Library of Congress’ catalogue. We use these indicators to estimate the connections between technological change and economic activity, and to investigate the relationship between fluctuations in innovative activity and the Great Depression. Although we do find links between technological change, output and productivity, our results suggest that the slowdown in technological progress in the early 1930s did not contribute significantly to the Great Depression. On the other hand, the remarkable acceleration in innovations after 1934 did play a role in the recovery.