Policy, Technology Adoption, and Growth

21 Pages Posted: 29 Dec 2000

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Robert G. King

Boston University - Department of Economics; Federal Reserve Bank of Richmond - Research Department; National Bureau of Economic Research (NBER)

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Sergio T. Rebelo

Northwestern University - Kellogg School of Management; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: March 1994

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.

Suggested Citation

Easterly, William and King, Robert G. and Levine, Ross Eric and Tavares Rebelo, Sergio, Policy, Technology Adoption, and Growth (March 1994). NBER Working Paper No. w4681. Available at SSRN: https://ssrn.com/abstract=254553

William Easterly (Contact Author)

New York University - Department of Economics ( email )

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Robert G. King

Boston University - Department of Economics ( email )

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Federal Reserve Bank of Richmond - Research Department

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Ross Eric Levine

University of California, Berkeley - Haas School of Business ( email )

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National Bureau of Economic Research (NBER)

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Sergio Tavares Rebelo

Northwestern University - Kellogg School of Management ( email )

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847-467-2329 (Phone)
847-491-5719 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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