Barriers to Technology Adoption and Development

Transcription

Stephen L. Parente, Edward C. Prescott
The Journal of Political Economy, 1994
Amir Abbas Salarkia, Sadegh Eghdami
Graduate School of Management and Economics
Sharif University of Technology
Macro Seminars, Spring 2015
1/23
Introduction
Weakness of Standard neoclassical growth model to account
for both:
huge disparity in income level across countries;
and fast speed of convergence of Development miracles
A new Theory based on Technology Adoption Barriers
Such as: regulatory & legal constraints, bribes that must be paid,
violence or threat of violence, worker strikes, …
This is not a theory of growth but rather is a theory of relative
income!
2/23
Model Economy
Business Sector
𝑌𝑡 =
𝜃𝑘
ℎ𝑡 . 𝐴𝑡 . 𝑁𝑡 . 𝐾𝑡
0 < 𝜃𝑘 < 1,
𝑁𝑡 ∈ 0, 𝑁
Given certain restrictions on technology parameters, this
production function is CRS in Aggregate
3/23
Model Economy
Business Sector
The increase in a firm’s Technology depends on the level of firm’s
technology relative to the level of world knowledge:
𝑋𝐴𝑡 = 𝜋
𝐴𝑡+1
𝐴𝑡
𝑆
𝑊𝑡
𝛼
𝑑𝑆 ⟹ 𝑋𝐴𝑡
𝜋 𝐴𝑡+1 𝛼 − 𝐴𝑡 𝛼
=
.
1+𝛼
𝑊𝑡 𝛼
𝜋 indexes for the size of technology Adoption barriers
World Knowledge grows at constant rate and all firms have access
to this knowledge:
𝑊𝑡 = 𝑊0 (1 + 𝛾)𝑡
4/23
Model Economy
Business Sector
An implication of this assumption is that development rates
increase over time
The number of years to develop from low income to moderate income economy
5/23
Model Economy
Business Sector
A firm’s stock of technology relative to world knowledge:
𝑍𝑡 ≡
In BGP
𝑍𝑡
𝑌𝑡
𝑊0𝛼
𝐴𝛼+1
𝑡
1 + 𝛾 𝛼 𝑡−1 (1 + 𝛼)
remains constant
𝜃𝑧 ≡ 1 (1 + 𝛼) ,
𝑋𝑧𝑡 ≡ 𝑋𝐴𝑡
𝜃
𝜃
𝑌𝑡 = 𝜇. ℎ𝑡 . (1 + 𝛾)(1−𝜃𝑧)𝑡 . 𝑁. 𝐾𝑡 𝑘 . 𝑍𝑡 𝑧
𝑍𝑡+1
1
=
(1 + 𝛾)(1−𝜃𝑧 )
1
. 𝑍𝑡 + 𝑋𝑧𝑡
𝜃𝑧
𝜋
CRS condition: 𝜃𝑘 + 𝜃𝑧 < 1 → there is an optimum firm size
6/23
Model Economy
Business Sector
Value of a firm’s dividends at time t:
𝑉𝑓𝑡 = 𝑌𝑡 − 𝑤𝑡 ℎ𝑡 𝑁 − 𝑟𝑘𝑡 𝐾𝑡 − 𝑋𝑧𝑡
∞
𝑉(𝑍0 ) =
Assume there are 𝐿
𝑁
max
ℎ𝑡 , 𝐾𝑡 , 𝑍𝑡+1 ∞
𝑡=0
𝑝𝑡 𝑉𝑓𝑡
𝑡=0
firms with same initial technology!
Aggregate per capita production
𝑦𝑡 = 𝜆. ℎ𝑡 . (1 + 𝛾)
1−𝜃𝑧 𝑡
𝜃
𝜃
. 𝑘𝑡 𝑘 . 𝑧𝑡 𝑧
Change units such that 𝜆 = 1
7/23
Model Economy
House Hold Sector
A continuum of infinitely live households of measure L
∞
𝛽𝑡 𝑙𝑛(𝑐𝑡 ) + 𝜙𝑑 𝑙𝑛 𝑑𝑡 + 𝜙𝑙 𝑙𝑛(1 − ℎ𝑡 )
max
𝑐𝑡 ,𝑑𝑡 ,ℎ𝑡 ,𝑘𝑡+1 ∞
𝑡=0
𝑡=0
∞
𝑠. 𝑡.
∞
𝑝𝑡 𝑐𝑡 + 𝑥𝑑𝑡 + 𝑥𝑘𝑡 ≤
𝑡=0
𝑝𝑡 .
𝑡=0
𝑤𝑡 ℎ𝑡 + 𝑟𝑘𝑡 𝑘𝑡 + 𝑣𝑔𝑡 + 𝑣𝑓𝑡 − 𝜏 𝑤𝑡 ℎ𝑡 + (𝑟𝑘𝑡 − 𝛿𝑘 )𝑘𝑡 + 𝑣𝑓𝑡
𝑑𝑡+1 = 1 − 𝛿𝑑 𝑑𝑡 + 𝑥𝑑𝑡
𝑘𝑡+1 = 1 − 𝛿𝑘 𝑘𝑡 + 𝑥𝑘𝑡
8/23
Model Economy
Government Sector
Government’s Budget Constraint at date t:
𝑔𝑡 + 𝑣𝑔𝑡 = 𝜏 𝑤𝑡 ℎ𝑡 + (𝑟𝑘𝑡 − 𝛿𝑘 )𝑘𝑡 + 𝑣𝑓𝑡
Government Policy is a sequence: 𝑔𝑡 , 𝜏𝑡 , 𝑣𝑔𝑡
∞
𝑡=0
Assume: 𝜏𝑡 = 𝜏 , 𝑔𝑡 = 𝜎(𝑦𝑡 − 𝑥𝑧𝑡 )
9/23
Model Economy
Equilibrium Conditions
𝑝𝑡
𝑖𝑡 ≡
−1
𝑝𝑡+1
𝑟𝑑𝑡 ≡ 𝑖𝑡 + 𝛿𝑑
𝑟𝑧𝑡 ≡
1 + 𝑖𝑡 1 + 𝛾
1−𝜃𝑧
𝜃𝑧
− 1 . 𝜃𝑧
𝑘𝑡 : 𝑟𝑘𝑡 𝑘𝑡 = 𝜃𝑘 𝑦𝑡
𝑧𝑡 : 𝑟𝑧𝑡 𝑧𝑡 = 𝜃𝑧 𝑦𝑡
ℎ𝑡 : 𝑤𝑡 (ℎ𝑡 ) = (1 − 𝜃𝑘 − 𝜃𝑧 )𝑦𝑡
10/23
Model Economy
Equilibrium Conditions
𝑘𝑡+1
𝑖𝑡
: 𝑟𝑘𝑡 =
+ 𝛿𝑘
1−𝜏
𝑐𝑡+1
𝑐𝑡 :
= 𝛽 1 + 𝑖𝑡
𝑐𝑡
𝑟𝑑𝑡 𝑑𝑡
𝑑𝑡 :
= 𝜙𝑑
𝑐𝑡
𝜙𝑙 𝑐𝑡
𝑤𝑡 (ℎ𝑡 )(1 − 𝜏)
ℎ𝑡 :
=
1 − ℎ𝑡
ℎ𝑡
Goods market clearing: 𝑐𝑡 + 𝑥𝑑𝑡 + 𝑥𝑘𝑡 + 𝑔𝑡 = 𝑦𝑡 − 𝑥𝑧𝑡
11/23
Model Economy
Balanced Growth Path
In BGP 𝑦𝑡 , 𝑐𝑡 , 𝑥𝑑𝑡 , 𝑥𝑧𝑡 , 𝑥𝑘𝑡 , 𝑔𝑡 , 𝑑𝑡 , 𝑘𝑡 , 𝑧𝑡 , 𝑣𝑓𝑡 , 𝑣𝑔𝑡 grow at the
same time with the rate of:
(1 + 𝛾)(1−𝜃𝑧)
(1−𝜃𝑘 −𝜃𝑧 ) −1
Saving rates have level effect only: difference in policy do
not affect growth rates along BGP
12/23
Model Calibration
Postwar Japanese Development
US balanced growth observations identify all parameters
Instead of 𝜃𝑧 , because 𝑥𝑧 is not reported in national accounts
We assume all parameters except 𝜋 are the same
For what value of 𝜃𝑧 is the model consistent with postwar
Japanese development?
13/23
Model Calibration
This pattern is consistent with a regime change in 1973
14/23
Model Calibration
Consistent with
observations
from BOTH
Countries
15/23
Model Calibration
Model predictions
16/23
Output Disparity
Can difference in 𝜋 account for difference in income?
Comparison with Tax Rates
More than
40 times
difference
3 times
difference
17/23
Output Disparity
Can difference in 𝜋 account for difference in income?
For countries with stable relative income to US in 1950-88:
Country
Per Capita income
Relative to US
Technology
Barrier (𝝅)
United Kingdom
0.6
1.3
Colombia
0.22
2.3
Paraguay
0.16
2.8
Pakistan
0.10
3.5
18/23
Postwar Recoveries and Development Miracles
France
Change in 𝜋
𝜋=1.01
𝜋=1.25
19/23
West Germany
Change in 𝜋
𝜋=1.12
𝜋=0.88
20/23
South Korea
𝜋=1.44
Change in 𝜋
𝜋=3.5
21/23
Taiwan
𝜋=1.3
Change in 𝜋
𝜋=2.42
22/23
Concluding Remarks
Development miracle is a result o reductions in technology
adoption barriers.
The crucial test for the theory is to obtain direct measures
of magnitudes of barriers to technology adoption across
countries.
If the barriers prove to be the key to economic
development, the next step is to understand WHY barriers
vary across countries and times.
Role of trade, …?
23/23
Thanks for your Attention
Questions
24/23
Model Calibration
US Data
𝑐: nondurable goods expenditure plus service expenditures
less real estate services
𝑥𝑑 : consumer durable expenditures plus residential
structures investment
𝑥𝑘 : investment in physical equipment and nonresidential
structures plus inventory investment plus government
investment
𝑦𝑚 = 𝑦 − 𝑥𝑧 is measured output
25/23
Model Calibration
US Data
𝜏𝑦𝑚 are government receipts
𝑘 is the value of equipment plus nonresidential capital plus
one-half the value of land
26/23
Model Calibration
US Balanced Growth Development Observation
𝑘, 𝑑
𝑥𝑘 , 𝑥𝑑
𝑂𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛
Growth
Rate
𝑑𝑡+1 = 1 − 𝛿𝑑 𝑑𝑡 + 𝑥𝑑𝑡
𝛿𝑑
𝑘𝑡+1 = 1 − 𝛿𝑘 𝑘𝑡 + 𝑥𝑘𝑡
𝛿𝑘
𝑔 = 0.9 ∗ 𝑔𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒
𝜎
𝑔𝑡 = 𝜎 𝑦𝑡 − 𝑥𝑧𝑡
𝑉𝑓𝑡 = 𝑌𝑡 − 𝑤𝑡 ℎ𝑡 𝑁 − 𝑟𝑘𝑡 𝐾𝑡 − 𝑋𝑧𝑡
𝑔𝑡 + 𝑣𝑔𝑡 = 𝜏 𝑤𝑡 ℎ𝑡 + (𝑟𝑘𝑡 − 𝛿𝑘 )𝑘𝑡 + 𝑣𝑓𝑡
𝜏
Observation: 𝜏𝑦𝑚 = 𝜏(𝑐 + 𝑥𝑘 +𝑥𝑑 + 𝑔)
𝛿𝑘
27/23
Model Calibration
𝑐𝑡+1
= 𝛽 1 + 𝑖𝑡
𝑐𝑡
Observation: i(average of return on equity)
𝛽
𝐺𝑟𝑜𝑤𝑡ℎ 𝑟𝑎𝑡𝑒
𝑖𝑡
𝑟𝑘𝑡 =
+ 𝛿𝑘
1−𝜏
𝑟𝑘
𝜃
𝜃
𝑌𝑡 = 𝜇. ℎ𝑡 . (1 + 𝛾)(1−𝜃𝑧 )𝑡 . 𝑁. 𝐾𝑡 𝑘 . 𝑍𝑡 𝑧 𝛿𝑘
𝑟𝑧𝑡 ≡
1 + 𝑖𝑡 1 + 𝛾
1−𝜃𝑧
𝜃𝑧
− 1 . 𝜃𝑧
𝑟𝑘𝑡 𝑘𝑡 = 𝜃𝑘 𝑦𝑡
Z
(1−𝜃𝑘 −𝜃𝑧 ) −1
𝑟𝑧
𝐴𝑠𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛: 𝜃𝑧
𝛾
y
𝑟𝑧𝑡 𝑧𝑡 = 𝜃𝑧 𝑦𝑡
(1 + 𝛾)(1−𝜃𝑧 )
𝜃𝑘
28/23
Model Calibration
𝑤𝑡 ℎ𝑡 = 1 − 𝜃𝑘 − 𝜃𝑧 𝑦𝑡
𝑤(ℎ)
𝑟𝑑𝑡 = 𝑖𝑡 + 𝛿𝑑
𝑟𝑑
𝑟𝑑𝑡 𝑑𝑡
= 𝜙𝑑
𝑐𝑡
𝜙𝑙
𝜙𝑙 𝑐𝑡
𝑤𝑡 (ℎ𝑡 )(1 − 𝜏)
=
1 − ℎ𝑡
ℎ𝑡
𝜙𝑑
𝑂𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑐, 𝑑 𝑎𝑛𝑑 ℎ
29/23

Barriers to Technology Adoption and Development

Transcription

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