Solow and the Native Americans: Technological Residuals and the Economic Performance of U.S. Native American Economies

This paper decomposes the large regression residuals of income across 84 U.S. Native American economies (USNAEs) into Solow and Solow-like parts. Decomposition is accomplished algebraically. The calculations find a weak to negative correlation between income and Solow residuals, and a strong correlation between income and Solow-like residuals, especially those associated with human capital and external technology. It also finds that technological residuals are skewed towards high income USNAEs. The reason seems to be that high income USNAEs are better able to build human capital which supports the Nelson-Phelps channel for transmitting technology from external sources.