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Adjusting to a New Technology: Experience and Training

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  • Elhanan Helpman
  • Antonio Rangel

Abstract

In this paper we study how aggregate output responds to the arrival of a new General Purpose Technology (GPT) by looking at adjustment mechanisms that operate through labor markets. We show that under a wide set of circumstances the arrival of a new GPT that raises long-run output can trigger a recession in the short-run. Furthermore, we characterize features of the GPT that produce a cyclical adjustment path. An initial recession occurs whenever a higher education level is required to operate the new GPT. But a recession can also occur when the new GPT has lower educational requirements. A cyclical adjustment path is more likely when inexperienced workers are less productive with the new technology and the faster productivity rises with experience in the new sector.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6551.

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Date of creation: May 1998
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Publication status: published as Journal of Economic Growth, Vol. 4, no. 4 (December 1999): 359-383
Handle: RePEc:nbr:nberwo:6551

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  1. Philippe AGHION & Peter HOWITT, 1998. "On the Macroeconomic Effects of Major Technological Change," Annales d'Economie et de Statistique, ENSAE, issue 49-50, pages 53-75.
  2. Helpman, E. & Trajtenberg, M., 1996. "Diffusion of General Purpose Technologies," Papers, Tel Aviv - the Sackler Institute of Economic Studies 24-96, Tel Aviv - the Sackler Institute of Economic Studies.
  3. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 756, Princeton University, Department of Economics, Industrial Relations Section..
  4. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 8(2), pages 202-29, April.
  5. Helpman, Elhanan & Trajtenberg, Manuel, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1080, C.E.P.R. Discussion Papers.
  6. Andreas Hornstein & Per Krusell, 1996. "Can Technology Improvements Cause Productivity Slowdowns?," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 209-276 National Bureau of Economic Research, Inc.
  7. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
  8. repec:fth:prinin:377 is not listed on IDEAS
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