Endogenous Technology Research Articles

Endogenous technologies and productivity in rice production: Roles of social instability in Myanmar since 2021

Endogenous technologies and productivity in rice production: Roles of social instability in Myanmar since 2021

A Lucas island model to analyse labour movement choice between cities based on personal characteristics

The labour movement has been a key factor for cities’ development and caused regional inequality between cities. Although empirical studies have been conducted to investigate it, little theoretical evidence has been provided to find out the underlying mechanism. This paper describes and derives a Lucas-Prescott style island model to study the location choices of the heterogeneous agents by utilising endogenous technology growth, which in turn influences personal human capital growth. It leads to the U-shape curve of the inequality of wage income with the technology of these islands but not in terms of total income. In the extended two-goods model, the magnitude of the implications is increased by the impact of non-tradable goods price. Together with empirical research using the US census data, this paper finds that skilled labours with less endowed wealth tend to live in large cities for its high salary. On the other hand, those less-skilled but with more endowed wealth tend to live in cities with better environment, which drives up the price level of non-tradable goods in these cities. This explains the population concentration in the super cities and the high housing price-wage ratio in some beautiful cities, which provides theoretical basement for further empirical studies about labour movement in other cities

Post-neoliberal globalization: international trade rules for global prosperity

Abstract This paper analyses frameworks for the design of the rules for international trading, assuming that it is possible to have some rule of law. In the Arrow–Debreu benchmark, where there is no economic power and political power is seemingly irrelevant, there is no need for trade agreements—free trade is the optimal policy for each country. But under even minimal deviations from that benchmark, trade agreements matter. We focus on environments in which there are market failures, technology is endogenous, and there is political power. Power dynamics play, for instance, a critical role in the design, implementation, and enforcement of agreements, with the latter being a critical difference between international agreements and domestic contracts and a key determinant of the feasibility and consequences of agreements. With endogenous technology, trade rules proscribing industrial policies may lead to lower growth and greater cross-country inequalities. Finally, we develop a normative framework which may be useful in the design and implementation of trade rules.

Emission regulation: Prices, quantities and hybrids with endogenous technology choice

This paper examines the investment incentives of market-based regulation, focusing on the technology characteristics that different regulatory schemes tend to incentivize. The firms’ technology choice is socially optimal if and only if the aggregate emission allowance supply is completely inelastic. Furthermore, in the presence of uncertainty, elastic emission allowance supply, and strictly convex environmental damage, it is optimal to tax investments in technologies that induce a large variance in emissions. Lastly, price elastic supply of emission allowances may either increase or decrease the volatility in the product market, depending on the risk environment the firms face. The results indicate that introduction of permit price-stabilizing measures in an emission trading system will come at the cost of suboptimal technology investments, and may also lead to increased fluctuations in product prices.

A paradox of coalition building in public good provision

Does partial coalition among players help mitigate the issue of underprovision of public goods? This study considers endogenous coalition formation and endogenous technology choices in a model of the private provision of global public goods. We show that the possibility of future interstate (partial) coordination may hinder the current adoption of better technology by a country outside the cooperation, which may exacerbate an existing underprovision problem. Specifically, in the subgame perfect equilibrium of a three-stage game, we find two paradoxical results: the inability to form future partial coalitions encourages a country outside the cooperation to adopt better technology, which could lead to an increase in the total public good supply and an improvement of global welfare. These results have important policy implications. For example, in the context of the Paris Agreement, if a major country announces reduced nationally determined contributions in a strategic move to adopt less advanced technology to motivate other countries to form coalitions, it may ultimately lead to a decrease in the overall supply of public goods and global welfare.

A carbon tax versus clean subsidies: Optimal and suboptimal policies for the clean transition

A three-sector – services, clean and dirty - integrated assessment model with endogenous technology is described. Optimal policy leads to a period of intense clean research and requires a carbon tax and clean research subsidies. Using multiple calibrations, I explore the relative performance of these instruments when acting alone, along with a clean production subsidy and a dirty research tax. A carbon tax wins in most, but if optimal policy occurs after 2050, each instrument wins in some calibrations. Both a carbon tax and a clean production subsidy should apply if research instruments are unavailable. (JEL O30, O44, Q54, Q56, Q58).

Estimating Worker Complementarity with an Endogenous Technology Model: Evidence from U.S. Occupational Wages

Estimating Worker Complementarity with an Endogenous Technology Model: Evidence from U.S. Occupational Wages

The dynamic of discriminatory reform: how does discretionary pricing neutralize the productivity gains of energy subsidy reform in Iran?

ABSTRACT A distortion caused by previous policies could distort the results of reforms. This may explain why policies to reduce industrial fuel subsidies have not necessarily resulted in increases in aggregate productivity in countries with mandated pricing. To identify and measure these distortions’ effects, we estimate a structural dynamic firm model with endogenous technology adaptation using data from the manufacturing firms in Iran. By connecting two price distortions and their results on the real sector, results suggest significant room for a distributional policy. We estimated dispersion elasticity comparable to the price elasticity of energy consumption in the manufacturing sector. Results suggest that the intensive margin is the primary driver of energy price elasticity, whereas the other channels mostly offset it. Moreover, total factor productivity slightly improves in light of a reduction in energy consumption if, at the same time, the redistribution policy boosts the aggregate demands.

Endogenous technology cycles in dynamic R&D networks

We study the coevolutionary dynamics of knowledge creation and diffusion with the formation of R&D collaboration networks. The novel examination of a large R&D collaboration network over several decades reveals a pronounced oscillatory (cyclical) pattern in the R&D collaboration intensity, which is not captured by existing theoretical studies. Here, we propose a new model of R&D network formation in which firms form R&D collaborations with others possessing a complementary portfolio of technologies. Innovations and knowledge spillovers alter the composition of these portfolios over time, leading to changes in the network of R&D collaborations. We show that our model is not only able to explain the emergence of oscillatory dynamics in R&D networks, but also has important policy implications. First, we demonstrate that there exists a critical threshold level for spillovers between R&D collaborating firms that must be exceeded for R&D collaborations to effectively contribute to knowledge creation in the economy. The threshold indicates that policies promoting collaborative R&D can only be successful in fostering innovations if they are substantial enough so that spillovers are above the threshold. Second, policies strengthening competition in R&D networks are found to promote oscillatory fluctuations, potentially destabilizing the network.

Distorted Innovation: Does the Market Get the Direction of Technology Right?

In the presence of markup differences, externalities, and other social effects, the direction of innovation can be systematically distorted. I build a simple model of endogenous technology to study distortions in the direction of innovation. Empirical findings across a number of different areas are consistent with this framework's predictions. I use data from several studies to estimate the framework's key parameters and combine them with rough estimates of differential externalities and markups to provide suggestive evidence that innovation distortions can be substantial in the context of industrial automation, health care, and energy, and that correcting them could have sizable welfare benefits.

Hindcasting to inform the development of bottom-up electricity system models: The cases of endogenous demand and technology learning

Bottom-up, technology-rich electricity system models are commonly used to generate scenarios for policy support at a national or global level. In literature, previous hindcasting studies (also called retrospective modeling or ex-post modeling) evaluated existing models rather than sought to inform model development from the beginning. In this study, we present a hindcasting exercise with D-EXPANSE model for national electricity systems in 31 European countries over the 1990–2019 period. We develop several model versions with or without elastic electricity demand and with or without endogenous technology learning, and use hindcasting to choose the most accurate configuration of the bottom-up model. The hindcasting results show that a model with endogenous elastic demand can capture well the real-world evolution of electricity demand, if elasticity factor is chosen well and if the countries did not undergo severe structural changes. Endogenous technology learning, however, increases the uptake of new emerging technologies in cost-optimal scenarios, but still cannot fully capture the real-world dynamics and at times even introduces further inaccuracies.

Research on the Impact of Digital Empowerment on China’s Human Capital Accumulation and Human Capital Gap between Urban and Rural Areas

Human capital is a key factor in the economic growth and sustainable development of a country. However, the impact of digitalization on human capital accumulation and the urban-rural human capital gap in China is seldom a focus in the literature. This paper establishes a three-sector economic growth model surrounding knowledge accumulation, endogenous technology, and labor mobility. It is designed to theoretically explain the influence of digital empowerment on human capital accumulation and its urban-rural gap in an economy. An empirical test is also conducted using CFPS panel data for 25 Chinese provinces from 2016 to 2018. The results show that: Firstly, digital empowerment significantly promotes the accumulation of human capital in rural and urban areas. The number of years of education increases by 1.37% in rural areas and 3.07% in urban areas for each index point of digitalization increase. Secondly, the impact of digitalization on the human capital gap between urban and rural areas demonstrates an inverted U-shaped curve. However, it is still within the Matthew Effect that the human capital gap between urban and rural areas is widening in tandem with digital development. Finally, the Matthew Effect in digitalization on the urban-rural human capital gap is relatively larger in the female group, higher education population, and larger family size.

Capitalization of Endogenous Technologies for Processing Cereals-Based Fermented Porridges in Northern Benin

Capitalization of Endogenous Technologies for Processing Cereals-Based Fermented Porridges in Northern Benin

Endogenous Technology, Scarring and Fiscal Policy

Endogenous Technology, Scarring and Fiscal Policy

The macroeconomic effects of a carbon tax to meet the U.S. Paris agreement target: The role of firm creation and technology adoption

We analyze the labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates labor force participation and two margins of adjustment influenced by carbon taxes: (1) firm creation and (2) green production-technology adoption. A carbon-tax policy that reduces carbon emissions by 35 percent—broadly consistent with Biden Administration’s new Paris Agreement commitment—can generate mild positive long-run effects on consumption and output, an expansion in the number and fraction of firms that use green technologies, and greater labor force participation, with marginal changes in the unemployment rate. In the short term, the adjustment to a higher carbon tax need not be accompanied by losses in output and consumption or a substantial increase in unemployment. Abstracting from green technology adoption implies that the same policy has substantial adverse short- and long-term effects on labor income, consumption, and output. Our findings highlight the importance of considering endogenous technology adoption in assessments of the labor market and aggregate effects of a carbon tax.

The Role of Endogenous Technology in Making Sustained Economic Growth in Sub‒Saharan Africa: Panel GMM and VECM Approaches

This study examines the role of endogenous technology in making sustained economic growth in a panel of 36 Sub-Saharan Africa (SSA) countries over the period 1990-2020. We derive total physical capital, total employment productivity (TEP), total factor productivity (TFP) and terms of trade (TOT) growth rates using various concepts. In this sense, the panel of short-run vector error correction model (VECM) and panel of long–run generalized method of moments (GMM) are applied and the estimation results are obtained. The empirical results reveal that there are significantly positive impacts of the growth rates of TFP, TEP and terms of trade (TOT) on real GDP growth rate in the long -run. These are profoundly important indicators for SSA today that timely using endogenous technology can play the central role in succeeding economic growth. And hence, without a greater supply of home–grown talent in the areas of the economic sector, it may be hard to break down the vicious circle of poverty, build prosperous, inclusive and resilient economies that can be feeding the people and enabling the countries to compete with trade globally.

MILITARY EXPENDITURES AND ECONOMIC GROWTH IN NIGERIA: AN ARDL APPROACH

The main objective of this study is to assess the relationship between military expenditure and the level of economic growth in Nigeria. This study is framed theoretically on the economic growth theory with endogenous technology and the Augmented Solow model. The ex-post facto research method was adopted in this study and secondary data was collected over a time-frame of thirty-eight years which spanned from 1982 to 2020. Inferential statistics which includes the ARDL amongst others is used to analyse the data collected. The result shows that in the short-run, there is a positive relationship between military expenditure and economic growth in Nigeria and inversely related in the long-run. It is concluded from this study that military expenditure has a significant relationship with economic growth in Nigeria. It is recommended from this study that in addition to incurring of military expenditure, strategies should be set-up to promote the effectiveness and efficiency of the military in order to enhance economic growth in Nigeria.

Endogenous Technological Change and the New Keynesian Model

Abstract This paper develops and estimates a New Keynesian (NK) model with endogenous technology. It shows that introducing endogenous technology can solve three important puzzles that conventional NK models face: the inflation persistence, disinflationary news shock, and zero lower bound (ZLB) supply shock. First, the observed persistence in inflation is explained without relying on the conventional NK models' additional assumptions (e.g., backward price indexation). Second, it explains the observed disinflationary effect of a news shock. Third, the model avoids the conventional NK models' paradoxical, empirically inconsistent prediction that a negative supply shock is expansionary at the ZLB on interest rates.

The multifactorial aquaculture‐related COVID‐19 shock in Benin, West Africa: A socio‐economic perspective of mitigating the disruptive impacts on the small‐scale and subsistence producers

AbstractAquaculture development in Benin depends heavily on small‐scale and subsistence aquaculture producers (SSAPs), who are sustaining production activities. The aquaculture sector is vulnerable to market shocks because of its dependence on inputs and equipment, which are mainly imported from overseas. The recent outbreaks of global aquaculture diseases have also proven the sensitivity of the sector. The vulnerability of SSAPs is expected to increase as a subsequent result of the coronavirus disease 2019 (COVID‐19) pandemic. This is the reason why COVID‐19‐related difficulties affecting aquaculture production deserve to be evaluated in the country's aquaculture sector. We conducted an online survey to assess the impact of COVID‐19 and the resulting restrictive measures on the functioning of SSAPs farms. Data were collected from 98 SSAPs informants spread over the geographic area with high aquaculture production potential in the country. The rate of increase in input prices, linear discriminant and factorial correspondence analyses projected severe constraints in almost all the value chain. The rates of increase in the unit price of inputs increased from 14% to 188%, thus weakening aqua‐farmers’ purchasing capacity. COVID‐19 has led to a drop in the sales turnover of aqua‐farms, resulting in staff reductions and unemployment. Difficulties in accessing quality inputs have led to the disruption of fish growth and thus the production cycle. The sale of aquaculture products saw a 20%–30% drop in turnover in many farms. The critical challenges mentioned by both men and women SSAPs are mainly the high cost of fish feed, the rising input and transport costs, and the lack of financial resources. Therefore, short‐, medium‐, and long‐term mitigation measures are suggested and could help to alleviate these difficulties while sustaining the blue revolution already under way. This community of men and women SSAPs should adopt and strengthen their use of existing endogenous technologies as well as digital modern options for remote aquaculture sales, in order to cope with future disruptions. The scientific community should help to propose incentive‐based alternative options (e.g., affordable production systems, and efficient micro‐credit model) that can motivate SSAPs to continue with aquaculture, as a guarantee of the sustainability of their livelihoods.

Electromagnetic Signal Intelligent Identification Based on Radio Frequency Fingerprints

Due to the open nature of WIFI connection, it is exposing its private information to the attackers. Traditional WIFI security methods are no longer able to meet the current security needs, and more and more wireless-side physical layer security solutions provide solutions, among which RF fingerprinting is an endogenous security technology with potential. Constructing an effective and accurate method to identify WIFI devices that steal information is a difficulty that today’s society needs to face. The main problem is not only that the recognition accuracy is difficult to improve but also the problem of data shortage. In this paper, we first construct a large-scale WIFI real-world measurement dataset. Next, we use PSD and bispectrum features, as well as complex ResNet schemes for WIFI device identification experiments, and compare and analyze them from multiple perspectives. The experimental results show that the proposed algorithm can achieve up to 97% recognition accuracy among 100 devices. Moreover, when the SNR is 0 dB, the complex ResNet method can still achieve 78% recognition accuracy among 100 devices. Finally, this paper summarizes the experimental analysis of the measured dataset and discusses the open issues related to this area.