DP15730 Directed Technical Change in Labor and Environmental Economics

Author(s): David Hémous, morten olsen
Publication Date: January 2021
Keyword(s): automation, climate change, DTC, Endogenous Growth, Income inequality
JEL(s): E25, J24, O31, O33, O41, O44, Q55
Programme Areas: Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15730

It is increasingly evident that the direction of technological responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path. We show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and growing inequality in labor economics. We discuss whether the direction of innovation is efficient.