DP1139 Workers, Machines and Economic Growth

Author(s): Joseph Zeira
Publication Date: March 1995
Keyword(s): Convergence, Economic Growth, Income Distribution, Technology Adoption
JEL(s): O14, O33, O40, O41
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1139

This paper models technology adoption as replacing workers by machines, which perform the same job in the production process. The paper shows that such modelling of technology adoption affects significantly the analysis of economic growth. This model can explain large and persistent international differences in output levels and growth rates, caused by small differences in underlying parameters.