Working Paper: CEPR ID: DP1139
Authors: Joseph Zeira
Abstract: This paper models technology adoption as replacing workers by machines, which perform the same job in the production process. The paper shows that such modelling of technology adoption affects significantly the analysis of economic growth. This model can explain large and persistent international differences in output levels and growth rates, caused by small differences in underlying parameters.
Keywords: economic growth; technology adoption; convergence; income distribution
JEL Codes: 014; 033; 040; 041
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| technology adoption (O33) | economic growth (O49) |
| higher wages (J39) | technology adoption (O33) |
| higher interest rates (E43) | technology adoption (O33) |
| technology adoption (O33) | wage distribution (J31) |
| technology adoption (O33) | output levels (E23) |
| small differences in productivity (D29) | divergent paths in economic growth (O49) |
| overlap between technology adoption and labor substitution (O33) | nonconvexities in production (D24) |
| nonconvexities in production (D24) | international differences in output and growth (O47) |