This paper proposes the view that financial development and economic growth are linked through the characteristics of technology. Perhaps the most obvious connection between technology and financial innovation emerges through risk-sharing. Technology is modeled as a distribution function over...

This paper constructs a model of non-balanced economic growth. The main economic force is the combination of differences in factor proportions and capital deepening. Capital deepening tends to increase the relative output of the sector with a greater capital share (despite the equilibrium...

We consider how efficient markets adopt technologies that reduce dependence on volatile factors such as oil. We find a relationship between volatility and technology overlap: new technology entry rate exceeds old technology exit rate under sufficient uncertainty. From this follows that efficient...

In this paper I estimate unobserved labor-generated knowledge spillovers within and among six large macroeconomic sectors covering the totality of the US civilian economy from 1948 to 1991. Unobserved spillovers are identified by observed TFP changes measured using Dale Jorgenson’s...

Does medical technology originating in countries close to the technology frontier have a significant impact on health outcomes in countries distant from this frontier? This paper considers a framework where lagging countries may benefit from medical technology (a result of research and...

This paper explains market turbulence, such as the recent dotcom boom/bust cycle, as equilibrium industry dynamics triggered by technology innovation. When a major technology innovation arrives, a wave of new firms implement the innovation and enter the market. However, if the innovation...

This paper applies the insights of the literature on idiosyncratic shocks to inividual labor productivity to the dynamics of plant-level total factor productivity. Recent work in I.O. has emphasized the importance of firm- and plant-level heterogeneity in total factor productivity. Most of the...

We propose an approximation method for analyzing Ericson and Pakes (1995)-style dynamic models of imperfect competition. We develop a simple algorithm for computing an ``oblivious equilibrium,'' in which each firm is assumed to make decisions based only on its own state and knowledge of the long...