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Briefing
Innovation, Diffusion and Intellectual Property Rights
Our recent working paper studies innovation and diffusion of technology along an industry's evolution and characterizes how diffusion affects the incentives to innovate. In our analysis, firms participate in a competitive industry and face production capacity constraints. The entry of imitators thus increases industry supply and is socially beneficial to a degree. We show that, from the social welfare point of view, innovators should be compensated for intellectual property rights to internalize their knowledge spillovers to imitators. However, such compensation should be only partial due to ...
Working Paper
Changing Income Risk across the US Skill Distribution: Evidence from a Generalized Kalman Filter
For whom has earnings risk changed, and why? To answer these questions, we develop a filtering method that estimates parameters of an income process and recovers persistent and temporary earnings for every individual at every point in time. Our estimation flexibly allows for first and second moments of shocks to depend upon observables as well as spells of zero earnings (i.e., unemployment) and easily integrates into theoretical models. We apply our filter to a unique linkage of 23.5m SSA-CPS records. We first demonstrate that our earnings-based filter successfully captures observable shocks ...
Working Paper
Renewable Technology Adoption Costs and Economic Growth
We develop a dynamic general equilibrium integrated assessment model that incorporates costs due to new technology adoption in renewable energy as well as externalities associated with carbon emissions and renewable technology spillovers. We use world economy data to calibrate our model and investigate the effects of the technology adoption channel on renewable energy adoption and on the optimal energy transition. Our calibrated model implies several interesting connections between technology adoption costs, the two externalities, policy, and welfare. We investigate the relative effectiveness ...
Working Paper
Technology Adoption and Leapfrogging: Racing for Mobile Payments
Paying with a mobile phone is a cutting-edge innovation transforming the global payments industry. However, some advanced economies like the U.S. are lagging behind in mobile payment adoption. We construct a dynamic model with sequential payment innovations to explain this puzzle, which uncovers how advanced economies' past success in adopting card-payment technology holds them back in the mobile-payment race. Our calibrated model matches the cross-country adoption patterns of card and mobile payments and also explains why advanced and developing countries favor different mobile payment ...
Working Paper
The Effect of Vehicle Fuel Economy Standards on Technology Adoption
Many countries are tightening passenger vehicle fuel economy standards. The literature on passenger vehicle standards has used structural models to estimate their welfare effects. This paper provides the first empirical evidence on the effects of recently tightened fuel economy standards on technology adoption. Specifically, it investigates changes in the rate and direction of technology adoption, that is, the extent to which technology is used to increase fuel economy at the expense of other vehicle attributes. We find that recent U.S. and European standards have both increased the rate of ...
Journal Article
Technology Adoption and the Changing Role and Background of Clerical Workers
From 1980 through 2015, the share of clerical jobs in the employed labor force declined more significantly in large and expensive cities than in smaller cities. Moreover, the remaining workers performing these occupations in large and expensive cities had, on average, higher education levels and were more likely to perform tasks usually done by managerial and professional personnel when compared to their small-city counterparts. In this Economic Commentary, we show how these patterns are related to the uneven adoption of information communication technologies (ICT) across geographies and ...
The Rapid Adoption of Generative AI
An analysis suggests that generative AI has been quickly and widely adopted at home and in the workplace, with about 40% of the U.S. population ages 18 to 64 using it to some degree.
Working Paper
Two-sided Market, R&D and Payments System Evolution
It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a two-sided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary ...