7 research outputs found
Technology Adoption, Turbulence and the Dynamics of Unemployment
The divergence of unemployment rates between the United States and Europe coincided with a substantial acceleration in capital-embodied technical change in the late 1970s. Evidence suggests that European economies have lagged behind the United States in the adoption and usage of new technologies. This paper argues that the obsolescence of an economy's technological capital is a key determinant for the way the economy's labor market reacts to an acceleration in capital-embodied technical change. The proposed framework offers a novel explanation for the observed divergence of unemployment rates across economies that are hit by the very same shock (i.e. the acceleration in embodied technical change) but differ in their technology adoption. The results of the paper challenge the popular, but controversial, view that blames generous unemployment insurance for high unemployment in Europe. The analysis shows that the observed institutional heterogeneity is insufficient to explain the diverse evolution of unemployment rates
On the Allocation of Time
We document for the US and Continental Europe that home–production time remained
essentially flat during the last 50 years while changes in market time and leisure offset
each other. We then focus on the US and France during 1970–2005 which are on the
opposite sides of the spectrum: while US market time did not change much, French market
time decreased most strongly. We document for the US and France that capital in home
production and imputed labor productivities of home production have risen. We build a
version of the growth model with capital in market and home production to account for the
time allocation in both countries. We find that the interaction between taxes, home capital,
and home–labor–augmenting technical change is crucial
Social networks and the process of "globalization"
We propose a stylised dynamic model to understand the role of social networks in the phenomenon
we call "globalization." This term refers to the process by which even agents who are geographically far apart come to interact, thus being able to overcome what would otherwise be a fast saturation of local opportunities. A key feature of our model is that the social network is the main channel through which agents exploit new opportunities. Therefore, only if the social network becomes global (heuristically, it "reaches far in few steps") can global interaction be steadily sustained. To shed light on the conditions
under which such a transformation may, or may not, take place is the main objective of the paper.
One of the main insights arising from the model is that, in order for the social network to turn global, the economy needs to display a degree of "geographical cohesion" that is neither too high (for then global
opportunities simply do not arise) nor too low (then the meeting mechanism displays too little structure for the process to take off). But if globalization does materialize, we show that it is a robust state of affairs that often arises abruptly as key parameters change. This occurs, in particular, as the rate of arrival of ideas rises, or when there is a high enough increase in the range at which the network transmits
information
The Network Origins of Economic Growth
In this paper, we propose a new approach to represent a country's outward orientation.
Prior work mostly uses indicators of aggregate trade intensity, trade policy
or trade restrictiveness. Our approach offers a broader perspective as it measures
a country's level of integration not only by its set of direct trade connections with
the rest of the world but also through the full architecture of its second, third, and
all other higher-order connections. We apply our methodology to a sample of 167
countries spanning the period from 1962 to 2009 and perform a Bayesian modelaveraging
analysis on the determinants of growth. We find a prominent positive effect of integration on a country's level of per capita income, while the aforementioned
traditional measures of outward orientation display only a secondary, largely
insignificant, weight. This, we argue, highlights the network basis of economic growth
and adds a novel perspective to the notion of economic openness. We also perform
several sensitivity checks and conclude that our baseline findings are extremely robust
to different data input and alternative assumptions about the computation of
country integration
Technology Adoption, Turbulence and the Dynamics of Unemployment
The divergence of unemployment rates between the United States and Europe coincided with a substantial acceleration in capital-embodied technical change in the late 1970s. Evidence suggests that European economies have lagged behind the United States in the adoption and usage of new technologies. This paper argues that the obsolescence of an economy's technological capital is a key determinant for the way the economy's labor market reacts to an acceleration in capital-embodied technical change. The proposed framework offers a novel explanation for the observed divergence of unemployment rates across economies that are hit by the very same shock (i.e. the acceleration in embodied technical change) but differ in their technology adoption. The results of the paper challenge the popular, but controversial, view that blames generous unemployment insurance for high unemployment in Europe. The analysis shows that the observed institutional heterogeneity is insufficient to explain the diverse evolution of unemployment rates
Structural transformation, marketization, and household production around the world
We provide evidence on household and market production in 36 countries since 1960. On
average the household sector accounts for almost half of total hours worked. As GDP per
capita increases, the employment share of household production in total hours worked initially declines and then hardly changes while the employment shares of market goods and
services decrease and increase. Estimating the value added of household production yields
similar patterns. Labor productivity of household production is lower than and positively
correlated with that in the market. These findings can be used as an input into quantitative
work involving household production