Report

The scale of production in technological revolutions


Abstract: Many manufacturing industries, including the computer industry, have seen large increases in productivity growth rates and have experienced a reduction in average establishment size and a decrease in the variance of the sizes of plants. A vintage capital model is introduced where learning increases productivity on any given technology and firms choose when to adopt a new vintage. In the model, a rise in the rate of technological change leads to a decrease in both the mean and variance of the size distribution.

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 2000

Number: 269