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Technological Progress


  • Dale T. Mortensen
  • Christopher A. Pissarides


We generalize apparently contradictory results in the literature about the effect of exogenous technological progress on unemployment. We assume that new technology can be adopted either through creative job destruction or through onthe- job implementation at a cost. We show that there is a critical level of implementation cost where the effect of growth on employment switches from positive to negative at higher costs. In extensions of the model we show that gross job reallocation can increase at faster growth with no clear-cut effects on aggregate employment.
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  • Dale T. Mortensen & Christopher A. Pissarides, 1995. "Technological Progress," CEP Discussion Papers dp0264, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0264

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    References listed on IDEAS

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    Cited by:

    1. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
    2. Saint-Paul, Gilles, 2002. "Employment protection, international specialization, and innovation," European Economic Review, Elsevier, vol. 46(2), pages 375-395, February.
    3. Postel-Vinay, Fabien, 1998. "Transitional dynamics of the search model with endogenous growth," Journal of Economic Dynamics and Control, Elsevier, vol. 22(7), pages 1091-1115, May.
    4. Lisi, Gaetano, 2010. "Introduzione allo studio dei modelli di "matching" del mercato del lavoro
      [Introduction to the study of matching models of unemployment]
      ," MPRA Paper 22735, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General


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