Creator: Hansen, Gary D. (Gary Duane) and Prescott, Edward C. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 507 Description:
Presented at the ASSA meetings in Anaheim, CA.
Keyword: 1990, Productivity, Recession, 1991, Technological shocks, Labor, Technology shock, and Knowledge Subject (JEL): O33 - Technological change ; Research and development - Technological change : Choices and consequences ; Diffusion processes and G14 - General financial markets - Information and market efficiency ; Event studies
Creator: Parente, Stephen L. and Prescott, Edward C. Series: Economic growth and development Abstract:
Technology change is modeled as the result of decisions of individuals and groups of individuals to adopt more advanced technologies. The structure is calibrated to the U.S. and postwar Japan growth experiences. Using this calibrated structure we explore how large the disparity in the effective tax rates on the returns to adopting technologies must be to account for the huge observed disparity in per capita income across countries. We find that this disparity is not implausibly large.
Subject (JEL): O33 - Technological change ; Research and development - Technological change : Choices and consequences ; Diffusion processes and O41 - One, Two, and Multisector Growth Models