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The Impact of TFP Growth on Steady-State Unemployment

Christopher Pissarides () and Giovanna Vallanti ()

No 5002, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Theoretical predictions of the impact of TFP growth on unemployment are ambiguous, and depend on the extent to which new technology is embodied in new jobs. We evaluate a model with embodied and disembodied technology, capitalization, and creative destruction effects by estimating the impact of TFP growth on unemployment in a panel of industrial countries. We find a large negative impact which implies that embodied technology and creative destruction play no role in the steady-state dynamics of unemployment. Capitalization effects explain some of the estimated impact but a part remains unexplained.

Keywords: capitalization effect; creative destruction; embodied technology; TFP growth; unemployment (search for similar items in EconPapers)
JEL-codes: E24 J64 O51 O52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-dge and nep-mac
Date: 2005-04
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Journal Article: THE IMPACT OF TFP GROWTH ON STEADY-STATE UNEMPLOYMENT (2007) Downloads
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