Frictionless Technology Diffusion: The Case of Tractors

Rodolfo Manuelli and Ananth Seshadri

American Economic Review, 2014, vol. 104, issue 4, 1368-91

Abstract: Many new technologies display long adoption lags, and this is often interpreted as evidence of frictions inconsistent with the standard neoclassical model. We study the diffusion of the tractor in American agriculture between 1910 and 1960-a well-known case of slow diffusion-and show that the speed of adoption was consistent with the predictions of a simple neoclassical growth model. The reason for the slow rate of diffusion was that tractor quality kept improving over this period and, more importantly, that only when wages increased did it become relatively unprofitable to operate the alternative, labor-intensive, horse technology.

JEL-codes: L62 N51 N52 N71 N72 O33 Q11 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.4.1368
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Citations: View citations in EconPapers (52)

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Related works:
Working Paper: Frictionless technology diffusion: the case of tractors (2013)
Journal Article: Frictionless technology diffusion: the case of tractors (2003)
Working Paper: Frictionless Technology Diffusion: The Case of Tractors (2003)
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