Creator: He, Hui and Liu, Zheng Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 644 Abstract:
Wage inequality between education groups in the United States has increased substantially since the early 1980s. The relative number of college-educated workers has also increased dramatically in the postwar period. This paper presents a unified framework where the dynamics of both skill accumulation and wage inequality arise as an equilibrium outcome driven by measured investment-specific technological change. Working through equipment-skill complementarity and endogenous skill accumulation, the model does well in capturing the steady growth in the relative quantity of skilled labor during the postwar period and the substantial rise in wage inequality after the early 1980s. Based on the calibrated model, we examine the quantitative effects of some hypothetical tax-policy reforms on skill accumulation, wage inequality, and welfare.
关键词: Skill premium, Capital-skill complementarity, Investment-specific technological change, and Skill accumulation 学科: O33 - Technological Change: Choices and Consequences; Diffusion Processes, E25 - Aggregate Factor Income Distribution, J31 - Wage Level and Structure; Wage Differentials, and J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
Creator: Luttmer, Erzo G. J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 724 Abstract:
This paper describes how long-run growth emerges in four closely related models that combine individual discovery with some form of social learning. In a large economy, there is a continuum of long-run growth rates and associated stationary distributions when it is possible to learn from individuals in the right tail of the productivity distribution. What happens in the long run depends on initial conditions. Two distinct literatures, one on reaction-diffusion equations, and another on quasi-stationary distributions suggest a unique long-run outcome when the initial productivity distribution has bounded support.
关键词: Knowledge diffusion and Growth 学科: O33 - Technological Change: Choices and Consequences; Diffusion Processes
Creator: Atkeson, Andrew and Kehoe, Patrick J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 296 Abstract:
Many view the period after the Second Industrial Revolution as a paradigmatic example of a transition to a new economy following a technological revolution and conjecture that this historical experience is useful for understanding other transitions, including that after the Information Technology Revolution. We build a model of diffusion and growth to study transitions. We quantify the learning process in our model using data on the life cycle of U.S. manufacturing plants. This model accounts quantitatively for the productivity paradox, the slow diffusion of new technologies, and the ongoing investment in old technologies after the Second Industrial Revolution. The main lesson from our model for the Information Technology Revolution is that the nature of transition following a technological revolution depends on the historical context: transition and diffusion are slow only if agents have built up through learning a large amount of knowledge about old technologies before the transition begins.
学科: O33 - Technological Change: Choices and Consequences; Diffusion Processes, N71 - Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: Pre-1913, N61 - Economic History: Manufacturing and Construction: U.S.; Canada: Pre-1913, N72 - Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: 1913-, L60 - Industry Studies: Manufacturing: General, and N62 - Economic History: Manufacturing and Construction: U.S.; Canada: 1913-
Creator: Atkeson, Andrew and Kehoe, Patrick J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 513 Abstract:
In this paper, we build a model of the transition following large-scale economic reforms that predicts both a substantial drop in output and a prolonged pause in physical investment as the initial phase of the optimal transition following the reform. We model reform as a change in policy which induces agents to close existing enterprises using old technologies of production and to open up new enterprises adopting new technologies of production. The central idea of our paper is that it is costly to close old enterprises and open new enterprises because, in doing so, information capital built up about old enterprises is lost and time must pass before information capital about new enterprises can be acquired. Thus, an acceleration of the pace of industry evolution leads in the short run to a net loss of information capital, a drop in productivity, a recession, and a fall in physical investment. We calibrate our model of industry evolution, information capital, and transition to match micro data on industry evolution in the United States and macro data from the United States, Japan, and the former communist countries of Europe. We find that the loss of information capital that accompanies a major acceleration in the pace of industry evolution in an economy leads initially to a decade of recession and a five year pause in physical investment before the benefits of reform are realized.
关键词: Information capital, Recession, Transition, Industrial evolution, Economic reform, Technological evolution, Policy change, and Technology change 学科: O25 - Industrial Policy and O33 - Technological Change: Choices and Consequences; Diffusion Processes
Creator: Fogli, Alessandra and Veldkamp, Laura Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 572 Abstract:
Does the pattern of social connections between individuals matter for macroeconomic outcomes? If so, where do these differences come from and how large are their effects? Using network analysis tools, we explore how different social network structures affect technology diffusion and thereby a country's rate of growth. The correlation between high-diffusion networks and income is strongly positive. But when we use a model to isolate the effect of a change in social networks, the effect can be positive, negative, or zero. The reason is that networks diffuse ideas and disease. Low-diffusion networks have evolved in countries where disease is prevalent because limited connectivity protects residents from epidemics. But a low-diffusion network in a low-disease environment needlessly compromises the diffusion of good ideas. In general, social networks have evolved to fit their economic and epidemiological environment. Trying to change networks in one country to mimic those in a higher-income country may well be counterproductive.
关键词: Social networks, Pathogens, Technology diffusion, Development, Disease , Economic networks, and Growth 学科: E02 - Institutions and the Macroeconomy, O10 - Economic Development: General, I10 - Health: General, and O33 - Technological Change: Choices and Consequences; Diffusion Processes
Creator: Williamson, Stephen D. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 405 Abstract:
A model is constructed where banks provide access to a communication technology which facilitates trade. Bank liabilities may coexist with alternative means of payment in equilibrium, and there exist regions of the parameter space where banking dominates the payments system and where physical exchange media dominate. The model is consistent with some observations concerning the role of the banking system in economic development, and with characteristics of banking crises. In particular, in early stages of economic development: 1) rapid output growth is accompanied by an increasing share of banking in transactions activity and 2) there are recurrent banking "panics" where reductions in measured aggregate output coincide with increases in the use of alternative means of payment relative to bank liabilities. In later stages of development, growth slackens off, the share of banking in the payments system stabilizes and the economy is less likely to be subject to banking panics.
关键词: Financial panic, Banks, Banking panics, Communication cost, and Communication technology 学科: G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages and O33 - Technological Change: Choices and Consequences; Diffusion Processes
Creator: Luttmer, Erzo G. J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 678 Abstract:
Although employment at individual firms tends to be highly non-stationary, the employment size distribution of all firms in the United States appears to be stationary. It closely resembles a Pareto distribution. There is a lot of entry and exit, mostly of small firms. This paper surveys general equilibrium models that can be used to interpret these facts and explores the role of innovation by new and incumbent firms in determining aggregate growth. The existence of a balanced growth path with a stationary employment size distribution depends crucially on assumptions made about the cost of entry. Some type of labor must be an essential input in setting up new firms.
关键词: Heterogeneous productivity, Firm size distribution, Selection, and Organization capital 学科: O33 - Technological Change: Choices and Consequences; Diffusion Processes and E10 - General Aggregative Models: General