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...

Why is the adoption of more productive technologies more fiercely resisted in some societies than in others? This paper examines the role of market size and free trade in determining whether firms or workers resist the adoption of more advanced technologies. It puts forth a model whereby the...

This paper studies the adoption of nuclear magnetic resonance imaging (MRI) by US hospitals. I consider a timing game of new technology adoption. The dynamic game allows me to take both timing decisions and strategic interaction into account. The model can be solved using standard dynamic...

This paper provides a general framework for pricing of real options in continuous time for wide classes of payoff streams that are functions of Levy processes. As applications, we calculate the option values of multi-stage investment/disinvestment problems (sequences of embedded options, which...

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...

We introduce a model of endogenous growth in which the returns to innovation are determined by the technology adoption decisions of the users of the new innovative technologies. The technology adoption decisions in our model consist of two dimensions. The first is when to adopt a new technology....

Even though recent evidence suggests that productivity differences between countries account for the bulk of cross-country differences in per capita income levels and that a large part of these productivity differences are due to countries using different technologies, there is no formal...

Investment is often irreversible, especially at the aggregate level. This paper proposes and solves a general equilibrium model of technology adotpion when investment in the new technlogy is irreversible. In contrast to prior research, we consider a setup where the returns on technology adoption...

A plant has more flexibility in choosing among different technologies before undertaking an investment than after installing a specific machine. This paper argues that the irreversibility of factor intensity choice may play an important role in explaining the dynamics of investment in the...