Economics at your fingertips  

Short-Run Pain, Long-Run Gain? Recessions and Technological Transformation

Alexandr Kopytov, Nikolai Roussanov and Mathieu Taschereau-Dumouchel ()

No 24373, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent empirical evidence suggests that job polarization associated with skill-biased technological change accelerated during the Great Recession. We use a standard neoclassical growth framework to analyze how business cycle fluctuations interact with the long-run transition towards a skill-intensive technology. In the model, since adopting the new technology disrupts production, firms prefer to do so in recessions, when profits are low. Similarly, workers also tend to learn new skills during downturns. As a result, recessions are deeper during periods of technological transition, but they also speed up adoption of the new technology. We document evidence for these mechanisms in the data. Our calibrated model is able to match both the long-run downward trend in routine employment and the dramatic impact of the Great Recession. We also show that even in the absence of the Great Recession the routine employment share would have reached the observed level by the year 2012.

JEL-codes: E24 E25 E3 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-dge, nep-ino and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published as Alexandr Kopytov & Nikolai Roussanov & Mathieu Taschereau-Dumouchel, 2018. "Short-Run Pain, Long-Run Gain? Recessions and Technological Transformation," Journal of Monetary Economics, .

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Short-run pain, long-run gain? Recessions and technological transformation (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2020-09-12
Handle: RePEc:nbr:nberwo:24373