Working Paper: NBER ID: w4681
Authors: William Easterly; Robert King; Ross Levine; Sergio Rebelo
Abstract: This paper describes a simple model of technology adoption which combines the two engines of growth emphasized in the recent growth literature: human capital accumulation and technological progress. Our model economy does not create new technologies, it simply adopts those that have been created elsewhere. The accumulation of human capital is closely tied to this adoption process: accumulating human capital simply means learning how to incorporate a new intermediate good into the production process. Since the adoption costs are proportional to the labor force, the model does not display the counterfactual scale effects that are standard in models with endogenous technical progress. We show that our model is compatible with various standard results on the effects of economic policy on the rate of growth.
Keywords: Technology Adoption; Economic Growth; Human Capital
JEL Codes: O31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| public policy (J18) | economic growth (O49) |
| human capital accumulation (J24) | economic growth (O49) |
| technological adoption (O33) | economic growth (O49) |
| fiscal policies (taxes on income) (H31) | economic growth (O49) |
| subsidies for human capital and technology adoption (J24) | economic growth (O49) |
| adoption costs proportional to workforce (J39) | technology adoption (O33) |
| technology adoption (O33) | incorporation of new intermediate goods (L60) |