American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Modeling the Transition to a New Economy: Lessons from Two Technological Revolutions
American Economic Review
vol. 97,
no. 1, March 2007
(pp. 64–88)
Abstract
Many view the period after the Second Industrial Revolution as a paradigm of a transition to a new economy following a technological revolution, including the Information Technology Revolution. We build a quantitative model of diffusion and growth during transitions to evaluate that view. With a learning process quantified by data on the life cycle of US manufacturing plants, the model accounts for the key features of the transition after the Second Industrial Revolution. But we find that features like those will occur in other transitions only if a large amount of knowledge about old technologies exists before the transition begins. (JEL L60, N61, N62, N71, N72, O33)Citation
Atkeson, Andrew, and Patrick J. Kehoe. 2007. "Modeling the Transition to a New Economy: Lessons from Two Technological Revolutions." American Economic Review, 97 (1): 64–88. DOI: 10.1257/aer.97.1.64JEL Classification
- L60 Industry Studies: Manufacturing: General
- N61 Economic History: Manufacturing and Construction: U.S.; Canada: Pre-1913
- N62 Economic History: Manufacturing and Construction: U.S.; Canada: 1913-
- N71 Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: Pre-1913
- N72 Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: 1913-
- O33 Technological Change: Choices and Consequences; Diffusion Processes