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Working Paper
Technology adoption and mortality
We develop a quantitative theory of mortality trends and population dynamics. In our theory, individuals incur time and/or goods costs over their life cycle, to adopt a better health technology that increases their age-specific survival probability. Technology adoption is a source of a dynamic externality: As more individuals adopt the better technology, the marginal benefit of future adoption increases. The allocation of time and/or goods also depends on total factor productivity (TFP): As TFP grows, more resources are allocated to technology adoption. Both channels---the dynamic externality ...
Working Paper
Technology adoption, mortality and population dynamics
We develop a quantitative theory of mortality trends and population dynamics. Our theory emphasizes individual choices on costly adoption of healthy technologies and diffusion of knowledge about infections as a key channel for reducing mortality. Our theory is consistent with three observations on mortality: (i) The cross-country correlation between levels of mortality and income is negative; (ii) mortality in poor countries has converged to that of rich countries despite no convergence in income; and (iii) economic growth is not a prerequisite for mortality to decline. We calibrate our model ...
Working Paper
Markets, Externalities, and the Dynamic Gains of Openness
Inflows of foreign knowledge are the key for developing countries to catch up with the world technology frontier. In this paper, I construct a simple tractable model to analyze (a) the incentives of foreign firms to bring their know-how to a developing country and (b) the incentives of domestic firms to invest in their own know-how, given the exposure to foreign ideas and competition. The model embeds two diffusion mechanisms typically considered separately in the literature: externalities and markets. The dynamic gains of openness can be substantial under either mechanism, but their relative ...
Newsletter
The Global Diffusion of Ideas and Its Impact on Productivity and Growth
Economic growth often comes hand in hand with the growth of trade. However, according to quantitative models that rely on standard static mechanisms, the gains from trade are fairly small. This article introduces a model to study the diffusion of ideas across countries as a means of increasing productivity and provides a quantitative assessment of the role of trade in the transmission of knowledge.
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 ...
Journal Article
Technology Diffusion: The Case of Internet Banking
Taking internet banking as an example, we study diffusion of cost-saving technological innovations. We show that the diffusion of internet banking follows an S-shaped logistic curve as it penetrates a log-logistic bank-size distribution. We test the theoretical hypothesis with an empirical study of internet banking diffusion among banks across fifty U.S. states. Using an instrument-variable approach, we estimate the positive effect of average bank size on internet banking diffusion. The empirical findings allow us to examine the technological, economic, and institutional factors governing the ...