This paper extends the standard neoclassical model by considering a technology sector through which an economy with limited human capital attempts to catch up with a given "locomotive" pushing exogenously technical progress. In periods of technological stagnation, economies close enough to the...

I generalize a benchmark model of directed technical change to allow innovations and factors of production (here energy resources) to be substitutes or complements. I show that a dominant sector is forever locked-in under substitutability but researchers' market incentives can drive a transition...

We analyze the efficient subsidy for durable good technologies. We theoretically demonstrate that a policymaker faces a tension between intertemporally price discriminating by designing a subsidy that increases over time and taking advantage of future technological progress by designing a...