Short-run pain, long-run gain? Recessions and technological transformation
Nikolai Roussanov and
Mathieu Taschereau-Dumouchel ()
Journal of Monetary Economics, 2018, vol. 97, issue C, 29-44
Recent empirical evidence suggests that skill-biased technological change accelerated during the Great Recession. We use a neoclassical growth framework to analyze how business cycle fluctuations interact with a long-run transition towards a skill-intensive technology. In the model, the adoption of new technologies by firms and the acquisition of new skills by workers are concentrated in downturns due to low opportunity costs. As a result, shocks lead to deeper recessions, but they also speed up adoption of the new technology. Our calibrated model matches both the long-run downward trend in routine employment and key features of the Great Recession.
Keywords: Job polarization; Routine-biased technical change; Business cycle; Human capital investment; Great Recession (search for similar items in EconPapers)
JEL-codes: E24 E32 O33 J24 (search for similar items in EconPapers)
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Working Paper: Short-Run Pain, Long-Run Gain? Recessions and Technological Transformation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:97:y:2018:i:c:p:29-44
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