201. When Does Labor Scarcity Encourage Innovation?
- Author
-
Acemoglu, Daron
- Subjects
LABOR economics ,LABOR market ,TECHNOLOGICAL innovations & economics ,MACROECONOMICS ,UNITED States economy -- 19th century ,ECONOMICS ,RELIGION - Abstract
This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century United States. I define technology as strongly labor saving if technological advances reduce the marginal product of labor and as strongly labor complementary if they increase it. I show that labor scarcity encourages technological advances if technology is strongly labor saving and will discourage them if technology is strongly labor complementary. I also show that technology can be strongly labor saving in plausible environments but not in many canonical macroeconomic models. [ABSTRACT FROM AUTHOR]
- Published
- 2010
- Full Text
- View/download PDF