Trend breaks and the long-run implications of investment-specific technological progress

Moura, Alban (2021): Trend breaks and the long-run implications of investment-specific technological progress.

Abstract

I update the Greenwood, Hercowitz, and Krusell (1997) decomposition of U.S. growth into contributions from neutral and investment-specific technological progress. I allow the decomposition to vary across sub-samples, reflecting the presence of trend breaks in the data. The estimates suggest that neutral technological progress explained virtually all growth between 1950 and the mid-1970s. However, investment-specific technological progress accounts for about 75 percent of growth since the 1980s. These results support splitting the postwar sample and using two-sector models to study the recent period.

• Item Type: MPRA Paper
• Language: English
• Keywords: neutral technology; investment-specific technology; sources of long-run growth; structural breaks
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence

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