TY  - JOUR
AU  - Manuelli,Rodolfo E.
TI  - Technological Change, the Labor Market and the Stock Market
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8022
PY  - 2000
Y2  - November 2000
UR  - http://www.nber.org/papers/w8022
L1  - http://www.nber.org/papers/w8022.pdf
N1  - Author contact info:
Rodolfo Manuelli
Department of Economics
Washington University in St. Louis
Campus Box 1208;
St. Louis MO 63130-4899
Tel: 608/263-3877
Fax: 608/262-2033;608/263-3876
E-Mail: manuelli@artsci.wustl.edu
AB  - This paper presents a model in which a partially anticipated technological shock results, in the short-run, in lower investment and higher unemployment. Because of the expectation of future lower profits, the market value of existing firms --and the wages they pay-- decrease before the technology becomes available. When the new technology arrives, the market value of new firms rises, investment and average wages increase, but endogenous gradual adoption results in temporary wage dispersion among identical workers. The model shows that the factors that affect the rate of adoption of a new technology also influence the cross sectional dispersion of labor earnings among identical workers, and firms' market values. The predictions of the model seem to be broadly consistent with the U.S. experience of the last thirty years.
ER  -