Innovation and environmental policy: Clean vs. dirty technical change

We study a two sector endogenous growth model with environmental quality with two goods and two factors of production, one clean and one dirty. Technological change creates clean or dirty innovations. We compare the laissez-faire equilibrium and the social optimum and study first- and second-best policies. Optimal policy encourages research toward clean technologies. In a second-best world, we claim that a portfolio that includes a tax on the polluting good combined with optimal innovation subsidy policies is less costly than increasing the price of the polluting good alone. Moreover, a discriminating innovation subsidy policy is preferable to a non-discriminating one.

International trade, technical change and the demand for skills : how important is trade in quality differential products?

Magdeburg, Univ., Fak. für Wirtschaftswiss., Diss., 2012

North-South trade and directed technical change

In a world where poor countries provide weak protection for intellectual property rights (IPRs), market integration shifts technical change in favor of rich nations. Through this channel, free trade may amplify international income differences. At the same time, integration with countries where IPRs are weakly protected can slow down the world growth rate. An important implication of these results is that protection of intellectual property is most beneficial in open countries. This prediction, which is novel in the literature, is consistent with evidence from a panel of 53 countries observed in the years 1965-1990. The paper also provides empirical support for the mechanism linking North-South trade to the direction of technical change: an increase in import penetration from low-wage, low-IPRs, countries is followed by a sharp fall in R&D investment in a panel of US manufacturing sectors.

How do technical change and technological distance influence the size of the Okun’s Law coefficient?

How does technical change influence the size of the Okun’s Law coefficient? Using a nonlinear version of Okun’s Law augmented with technical change and technological distance, we show that the impact of output movements on unemployment variations is influenced by the imitation or innovation origins of technical change

Offshoring and directed technical change

To study the short-run and long-run implications on wage inequality, we introducedirected technical change into a Ricardian model of offshoring. A unique final good isproduced by combining a skilled and an unskilled product, each produced from a continuumof intermediates (tasks). Some of these tasks can be transferred from a skill-abundant Westto a skill-scarce East. Profit maximization determines both the extent of offshoring andtechnological progress. Offshoring induces skill-biased technical change because it increasesthe relative price of skill-intensive products and induces technical change favoring unskilledworkers because it expands the market size for technologies complementing unskilled labor.In the empirically more relevant case, starting from low levels, an increase in offshoringopportunities triggers a transition with falling real wages for unskilled workers in the West,skill-biased technical change and rising skill premia worldwide. However, when the extentof offshoring becomes sufficiently large, further increases in offshoring induce technicalchange now biased in favor of unskilled labor because offshoring closes the gap betweenunskilled wages in the West and the East, thus limiting the power of the price effectfueling skill-biased technical change. The unequalizing impact of offshoring is thus greatestat the beginning. Transitional dynamics reveal that offshoring and technical change aresubstitutes in the short run but complements in the long run. Finally, though offshoringimproves the welfare of workers in the East, it may benefit or harm unskilled workers inthe West depending on elasticities and the equilibrium growth rate.

North-south trade and directed technical change

In a world where poor countries provide weak protection for intellectual propertyrights, market integration shifts technical change in favor of rich nations. Throughthis channel, free trade may amplify international income differences. At the sametime, integration with countries where intellectual property rights are weakly protectedcan slow down the world growth rate. A crucial implication of these results is thatprotection of intellectual property is most beneficial in open countries. This prediction,which is novel in the literature, finds support in the data on a panel of 53 countriesobserved in the years 1965-1990.

Embodied technical change and the fluctuations of wages and unemployment

The paper shows that a matching model where technological change is partially embodied in the job match is successful in explaining the variability of unemployment and vacancies. If we incorporate long-term wage contracts into the model, it also explains a number of stylized facts on the dynamics of real wages, which have been found in the empirical labor literature.

Directed Technical Change and International Trade

Recent changes in comparative advantage in the largest OECD economies differ significantly from the predictions of Heckscher-Ohlin-Vanek theory. Japan's rising share of OECD machinery exports and the improvement in the comparative advantage of the USA and Germany in heavy industry were accompanied by growing scarcities of the factors used intensively in the favored sector of each country. Here we examine Acemoglu's (1998, 2002) hypothesis that technical change may be directed toward raising the marginal productivity of abundant factors. Testing this hypothesis with 1970-1992 export data from 14 OECD countries, we find evidence that international comparative advantage was reshaped by innovation biased toward the abundant factors in the largest economies.

Technical change and factor shares

The implications of technical change that directly alters factor shares are examined. Such change can lower the income of some factors of production even when it raises total output, thus offering a possible explanation for episodes of social conflict such as the Luddite uprisings in 19th century England and the recent divergence in the U. S. between wages for skilled and unskilled labor. An explanation also why underdeveloped countries do not adopt the latest technology but continue to use outmoded production methods. Total factor productivity is shown to be a misleading measure of technical progress. Share-altering technical change brings into question the plausibility of a wide class of endogenous growth models.

Technical change and technology policy: the case of numerically controlled lathes in Argentina

Includes bibliography

Notes on technical change induced under conditions of protection, distortions and rationing

Includes bibliography