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Finance and Economics Discussion Series
Finance and Economics Discussion Series logo links to FEDS home page Production Synergies, Technology Adoption, Unemployment, and Wages
Gwen Eudey and Miguel Molico

Abstract: Recent empirical work reveals considerable heterogeneity in the use of technologies within industries, suggesting technology adoption depends on factors other than industry type. We present a model in which the factors that lead to heterogenous technology adoption play a key economic role in explaining other aspects of the U.S. economy that have been the focus of recent theoretical work, including wage and technology dispersion within and between skill groups and the U-shaped pattern of measured productivity that many other researchers have attributed to learning economies or to production externalities.

Keywords: Search frictions, technology adoption

Full paper (314 KB PDF)

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Last update: February 9, 2009