Capital-labor substitution and TFP estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the...

We provide a general theoretical characterization of how technology choice affects the long-run elasticity of substitution between capital and labour. While the shape of the technology frontier determines the long-run growth path and the long-run elasticity, adjustment costs in technology choice...

Work ethics affects labor supply. This idea is modeled assuming that work is habit forming. This paper introduces working habits in a neoclassical growth model and compares its outcomes with a model without habit formation. In addition, it analyzes the impact of different forms of technical...

We build a directed technical change model of the British Industrial Revolution where one intermediate goods sector uses a fixed renewable energy (“wood”) quantity, and another uses coal at a fixed price. With a high enough elasticity of substitution between the two goods in producing final...

World and U.S. energy intensities have declined over the past century, falling at an average rate of approximately 1.2–1.5 percent a year. The decline has persisted through periods of stagnating or even falling energy prices, suggesting the decline is driven in large part by autonomous...

Does the successful deployment of digital technologies require complementary investment in skills? We conducted a pilot survey to investigate. The survey elicited information on whether the firm was adopting one of the three digital technologies of interest (AI, robotics, big data), provided...

We provide a general theoretical characterization of how firms' technology choice on a technology frontier determines the long-run elasticity of substitution between capital and labor. We show that the shape of the frontier determines factor shares and the elasticity of substitution between...

We study the origins of labor productivity growth and its differences across sectors. In our model, sectors employ workers of different occupations and various forms of capital, none of which are perfect substitutes, and technology evolves at the sector-factor cell level. Using the model we...

To study the drivers of the employment reallocation across sectors and occupations between 1960 and 2010 in the US we propose a model where technology evolves at the sector-occupation cell level. This framework allows us to quantify the bias of technology across sectors and across occupations....

In transitional economies like China, comparatively low real wages imply sub-OECD labor and skill shares of value added and comparatively high capital shares. Despite rapid real wage growth, however, rather than converge toward the OECD, China's low-skill labor share has been falling, due to...