This paper presents a Schumpeterian quality-ladder model incorporating the impact of new General Purpose Technologies (GPTs). GPTs are breakthrough technologies with a wide range of applications, opening up new innovational complementarities. In contrast to most existing models which focus on...

Recent empirical studies document that the level of resource misallocation in the service sector is significantly higher than in the manufacturing sector. We quantify the importance of this difference and study its sources. Conservative estimates for Portugal (2008) show that closing this gap,...

This paper explores the impacts of more rapid growth in labor productivity in the service sector in Asia based on an empirical general equilibrium model. The model allows for input-output linkages and capital movements across industries and economies, and consumption and investment dynamics. We...

This paper examines the implications of automation capital in a Solow growth model with two types of labour. We study the transition from standard production to production using automation capital which substitutes low-skilled workers. We assume that despite advances in technology, AI and...

Pervasive credit constraints have been seen as major sources of slow growth in developing economies. This paper clarifies a mechanism through which an inefficient financial system can reduce productivity growth. Using a two-sector model, second, we examine the implications for employment and the...

We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the...

We present a Schumpterian model of endogenous growth with General Purpose Technologies (GPTs) that captures two important historical stylized facts: First, from the beginning of mankind until today GPTs are arriving at an increasing frequency and, second, all GPTs heavily depended on previous...

Vulnerability to scarcity or to reduction of natural capital depends on defensive substitution possibilities that, in turn, are affected by the availability of other productive factors. However, in several developing countries asset distribution tends to be highly skewed. Taking into ac- count...

We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these new features of structural change can be explained by a dynamic open economy model with two primary driving forces, sector-biased productivity growth...

This paper assesses the possible dynamic effects of occupational entry regulations (OER) on productivity. It combines firm-level productivity data with a new cross-country policy indicator measuring the stringency of OER by the presence of administrative burdens, qualifications requirements, and...