Implementation of Technological Breakthroughs at Sector Level and Technology-Bias

Abstract

Heterogeneous goods are produced by heterogeneous sectors in an economy. The fact that there is inter-sectoral technology-heterogeneity is named technology-bias. The technology-bias is well documented and has important theoretical implications for economic growth and unemployment. We provide a theoretical model that explains the technology-bias and its development. We provide empirical evidence on the development of the technology-bias, explain this development by using our model-results and discuss the future development of the technology-bias. Last not least, we discuss the implications of our findings for the existing growth literature and structural change literature.

Keywords: sector technology, implementation of technological progress, structural change, growth, multi-sector growth models, neoclassical growth models

JEL Classification: O14, O41, O33