Working Paper: CEPR ID: DP15730
Authors: David Hemous; Morten Olsen
Abstract: It is increasingly evident that the direction of technological responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path. We show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and growing inequality in labor economics. We discuss whether the direction of innovation is efficient.
Keywords: endogenous growth; automation; directed technical change; climate change; income inequality
JEL Codes: O31; O33; O41; O44; E25; J24; Q55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic incentives (M52) | direction of technological innovation (O39) |
| lack of balanced growth path (O40) | slow development of green technologies (O44) |
| lack of balanced growth path (O40) | growing income inequality (D31) |
| innovation policies (O38) | technological outcomes (O33) |
| clean research subsidies (O38) | innovation outcomes (O36) |
| economic incentives (M52) | environmental innovation (Q55) |
| economic incentives (M52) | labor innovation (J89) |