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Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality trends and population dynamics. We emphasize diseases as causes of death and individuals' decisions to reduce their mortality by adopting, at some cost, a modern health-related technology. Adoption confers a dynamic externality: Adoption becomes cheaper as more individuals acquire the modern technology. Our model generates an S-shaped diffusion curve, whose shape dictates the pace of mortality reduction in each country. We use the model to explain the gradual decline of mortality in Western Europe in the 19th and 20th centuries as well as the ...
Working Paper
Does Disappointing European Productivity Growth Reflect a Slowing Trend? Weighing the Evidence and Assessing the Future
In the years since the Great Recession, many observers have highlighted the slow pace of labor and total factor productivity (TFP) growth in advanced economies. This paper focuses on the European experience, where we highlight that trend TFP growth was already low in the runup to the Global Financial Crisis (GFC). This suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. After the mid-1990s, European economies stopped converging, or even began diverging, from the U.S. level of TFP. That said, in contrast to the United ...
Working Paper
The UK Productivity “Puzzle” in an International Comparative Perspective
The UK’s slow productivity growth since 2007 has been referred to as a “puzzle”, as if it were a particularly UK-specific challenge. In this paper, we highlight how the United States and northern Europe experienced very similar slowdowns. The common slowdown in productivity growth was a slowdown in total factor productivity (TFP) growth; we find little evidence that capital deepening was an important independent factor. From a conditional-convergence perspective, most of the UK slowdown follows from the slowdown at the U.S. frontier. From the mid-1980s to 2007, the UK’s relative ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption confers a dynamic externality: Adoption becomes cheaper as more individuals use better technology. Our model generates a diffusion curve, whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages, and population dynamics in Western Europe. Unlike Malthusian theories based solely on income, ours is consistent with the observed ...
Working Paper
The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends?
This paper reviews advanced-economy productivity developments in recent decades. We focus primarily on the facts about, and explanations for, the mid-2000s labor-productivity slowdown in large European countries and the United States. Slower total factor productivity growth was the proximate cause of the slowdown. This conclusion is robust to measurement challenges including the role of intangible assets, rankings of productivity levels, and data revisions. We contrast two main narratives for the stagnating productivity frontier: The shock of the Global Financial Crisis; and a common slowdown ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption confers a dynamic externality: Adoption becomes cheaper as more individuals use better technology. Our model generates a diffusion curve, whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages, and population in Western Europe. Unlike Malthusian theories based solely on income, ours is consistent with the observed disconnect ...
Working Paper
Technology Adoption, Mortality, and Population Dynamics
We develop a quantitative theory of mortality and population dynamics. We emphasize individuals' decisions to reduce their mortality by adopting better health technology. Adoption becomes cheaper as more individuals use better technology. It also confers a dynamic externality by increasing the future number of individuals who use the better technology. Our model generates a diffusion curve whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages and population dynamics in Western Europe. Unlike ...
Working Paper
Convergence to Rational Expectations in Learning Models: A Note of Caution
This paper illustrates a challenge in analyzing the learning algorithms resulting in second-order difference equations. We show in a simple monetary model that the learning dynamics do not converge to the rational expectations monetary steady state. We then show that to guarantee convergence, the gain parameter used in the learning rule has to be restricted based on economic fundamentals in the monetary model.
Working Paper
Convergence to Rational Expectations in Learning Models: A Note of Caution
This paper illustrates a challenge in analyzing the learning algorithms resulting in second-order difference equations. We show in a simple monetary model that the learning dynamics do not converge to the rational expectations monetary steady state. We then show that to guarantee convergence, the gain parameter used in the learning rule has to be restricted based on economic fundamentals in the monetary model.
Report
The dual nature of trade: measuring its impact on imitation and growth
Imports of goods that embody foreign technology raise a country's output directly as inputs into production and indirectly through reverse-engineering of these goods, which contributes to domestic imitation and innovation. This paper first quantifies spillovers from high-technology imports from developed countries to domestic imitation and innovation in both developed and developing countries. It then considers the contribution of foreign and domestic innovation to real per capita GDP growth. ; International patent data for forty countries from 1970 to 1985 are used to create proxies for ...