Frictionless Technology Diffusion: The Case of Tractors

51 Pages Posted: 5 Apr 2003 Last revised: 27 Jun 2012

See all articles by Rody Manuelli

Rody Manuelli

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Ananth Seshadri

University of Wisconsin - Madison - Department of Economics

Date Written: April 2003

Abstract

Empirical evidence suggests that there is a long lag between the time a new technology is introduced and the time at which it is widely adopted. The conventional wisdom is that these observations are inconsistent with the predictions of the frictionless neoclassical model. In this paper we show this to be incorrect. Once the appropriate driving forces are taken into account, the neoclassical model can account for slow' adoption. We illustrate this by developing an industry model to study the equilibrium rate of diffusion of tractors in the U.S. between 1910 and 1960.

Suggested Citation

Manuelli, Rody E. and Seshadri, Ananth, Frictionless Technology Diffusion: The Case of Tractors (April 2003). NBER Working Paper No. w9604. Available at SSRN: https://ssrn.com/abstract=392991

Rody E. Manuelli (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-263-3877 (Phone)
608-262-2033 (Fax)

National Bureau of Economic Research (NBER)

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Ananth Seshadri

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-6196 (Phone)
608-263-3876 (Fax)

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