TY  - JOUR
AU  - Comin,Diego
AU  - Hobijn,Bart
TI  - Implementing Technology
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12886
PY  - 2007
Y2  - February 2007
UR  - http://www.nber.org/papers/w12886
L1  - http://www.nber.org/papers/w12886.pdf
N1  - Author contact info:
Diego A. Comin
Harvard Business School
Soldiers Field
Boston, MA 02163
Tel: 617/495-5011
E-Mail: dcomin@hbs.edu

Bart Hobijn
Federal Reserve Bank of San Francisco
Economic Research Department, Mailstop 1130
101 Market Street, 11th floor
San Francisco, CA 94105
Tel: 415 974 2314
Fax: 415 974 2168
E-Mail: bart.hobijn@sf.frb.org
AB  - We introduce a tractable model of endogenous growth in which the returns to innovation are determined by the technology adoption decisions of the users of new technologies. Technology adoption involves an implementation investment that determines the initial productivity of a new technology. After implementation, learning increases the productivity of a technology to its full potential. In this framework, implementation enhances growth, while growth increases obsolescence and reduces implementation. In a calibrated version of our model, the optimal policy involves a subsidy to capital and to implementation and a R&D tax. This policy would lead to a welfare improvement of 7.6 percent. Out of steady-state analysis yields that the transitional dynamics of the detrended variables after a shock to capital are very similar to the dynamics of the neoclassical growth model, but transitory shocks have permanent effects on the level of productivity.
ER  -