We model Moore's Law as efficiency of computer producers that rises as a by-product of their experience. We find that (a) because computer prices fall much faster than the prices of electricity-driven and diesel-driven capital ever did, growth in the coming decades should be very fast, and that...

This paper analyzes a decentralized process for the diffusion of knowledge. In equilibrium, the economy converges from an initial distribution of knowledge over agents to the steady-state distribution, which is unique. Because of the public good aspect of information, too little learning takes...

Investment of U.S. firms responds asymmetrically to Tobin's Q: Investment of established firms -- `intensive' investment -- reacts negatively to Q whereas investment of new firms -- `extensive' investment -- responds positively and elastically to Q. This asymmetry, we argue, reflects a...

This paper develops a model of sectoral labor mobility and tests its main implications. The model nests two distinct hypotheses on the origin of mobility: (a) sectoral shocks (Lucas and Prescott, 1974) and (b) worker-employer mismatch (Jovanovic, 1979, Miller, 1984, Flinn, 1986). We estimate the...

We study 114 years of U.S. stock market data and find That there are large cohort effects in stock prices, effects that we label 'organization capital,' That cohort effects grew at a rate of 1.75% per year, That the debt-equity ratio of all vintages declined, That three big technological waves...

Our paper reports the following two findings: 1) In monthly data, bond purchases by the Fed raise bond prices and reduce bond yields. The residual bond-supply to traders is not fully predictable, and this supply-risk adds between 10 and 40 basis points to the standard deviation of the real...

We argue that takeovers have played a major role in speeding up the diffusion of new technology. The role that they play is similar to that of entry and exit of firms. We focus on and compare two periods: 1890-1930 during which electricity and the internal combustion engine spread through the...

We model Moore's Law as efficiency of computer producers that rises as a by-product of their experience. We find that (1) Because computer prices fall much faster than the prices of electricity-driven and diesel-driven capital ever did, growth in the coming decades should be very fast, and that...

A firm has investment options that it may use up immediately, or store for future use. A patent, e.g., is an option to implement an idea via a product or process innovation. Other investment options are protected by secrecy. An investment option is a profit opportunity that requires an...