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From indoctrination to the culture of change: technological progress, adaptive skills, and the creativity of nations

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  • Murat F. Iyigun
  • Ann L. Owen

Abstract

We distinguish learning in a static environment from that in a dynamic environment to show the existence of an important interaction between the development of new technologies and human capital accumulation. Since technological progress creates a more dynamic and uncertain environment, it not only increases the rewards to education and ability but also enhances adaptive skills. The latter in turn determine how effectively new technologies are utilized in production because they help the workforce to innovate and improve new technologies. Thus, the adaptive skills of a workforce are an important link with which inventions and innovations play complementary roles in technological progress. Our results suggest why countries that have comparable levels of aggregate human capital and that are in similar stages of development may differ significantly in how successful they are in implementing new technologies. They also show how the intergenerational transmission of knowledge evolves endogenously with technological change. If technology changes rapidly during the process of development, learning fosters the intergenerational propagation of adaptive skills. In contrast, if technological progress is slow during development, the education of the young reinforces the learning of long-held norms.

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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 642.

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Date of creation: 1999
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Handle: RePEc:fip:fedgif:642

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Related research

Keywords: Technology ; Human capital;

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  1. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  2. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
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  9. Huw Lloyd-Ellis, 1999. "Endogenous Technological Change and Wage Inequality," American Economic Review, American Economic Association, vol. 89(1), pages 47-77, March.
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Cited by:
  1. William F. Maloney, 2002. "Missed Opportunities: Innovation and Resource-Based Growth in Latin America," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.

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