Institutional Affiliation: University of California at Los Angeles
|Transitional Dynamics in Aggregate Models of Innovative Investment|
with , : w25321
What quantitative lessons can we learn from models of endogenous technical change through innovative investments by firms for the impact of changes in the economic environment on the dynamics of aggregate productivity in the short, medium, and long run? We present a unifying model that nests a number of canonical models in the literature and characterize their positive implications for the transitional dynamics of aggregate productivity and their welfare implications in terms of two sufficient statistics. We review the current state of measurement of these two sufficient statistics and discuss the range of positive and normative quantitative implications of our model for a wide array of counterfactual experiments, including the link between a decline in the entry rate of new firms and a sl...
Published: Andrew Atkeson & Ariel Burstein & Manolis Chatzikonstantinou, 2019. "Transitional Dynamics in Aggregate Models of Innovative Investment," Annual Review of Economics, vol 11(1).