, in combination with the expectation of a future switch towards another technology, may actually reduce current investment … in that technology (while temporarily increasing current investment in competing technologies). The latter enables … that technology at the time of the switch. …

We construct a measure of aggregate technology change, controlling for imperfect competition, varying utilization of … capital and labor, and aggregation effects. On impact, when technology improves, input use falls sharply, and output may fall … frictionless dynamic general equilibrium models, which generally predict that technology improvements are expansionary, with inputs …