Liberal think tanks claim that low growth in US wages is reducing incentives for labor-saving innovation and hence creating low labor productivity. Since conservatives reject this, a recent New York Times article stated that economists have a "chicken or egg problem" here. This paper uses modern...

There is a growing literature where authors investigate the effect of trade liberalization on productivity. Nearly all such studies assume that trade policy is determined independently of productivity, hence it is exogenous. I show, both theoretically and empirically, that this assumption is not...