Innovation, Job Creation and Economic Growth in the U.S.*
ByungWoo Kim ()
Journal of Business Economics and Information Technology, 2015, vol. 2, issue 4, 2
Unemployment is caused by workers moving to new plants utilizing new technology. (“Creative destruction effect.”) (Aghion and Howitt, 1998) Considering the goodness of fit and estimation results, we can see that, in the past, the evidence is strongly in favor of the capitalization effect of growth on unemployment in the U.S. economy. However, the increase of the estimated random coefficient in the early 2000s shows also the offset effect of creative destruction. In addition, we can see the decreasing trends of those capitalization effects. Finally, we share a common view with Blanchard (2006) that the relatively high unemployment rate in 2002~2003 comes from investors’ skepticism about the economy (and productivity growth), which cannot lead to a high rate of investment (little “capitalization effect”).
Keywords: R&D investment; technical innovation; economic growth; creative destruction; capitalization effect (search for similar items in EconPapers)
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