Economic growth and economic development 711

Introduction to Modern Economic Growth between skilled and unskilled workers The estimates are typically between 1.4 and See, for example, Katz and Murphy (1992), Krusell, Ohanian, Rios-Rull and Violante (1999), and Angrist (1995) A number of estimates are summarized and discussed in Hamermesh (1993) and Acemoglu (2002b) Evidence that 19th century technologies were generally labor-complementary (unskilled-biased) is provided by, among others, James and Skinner (1985) and Mokyr (1990) , while Goldin and Katz (1998) argued the same for a range of important early 20th century technologies Blanchard (1997) discusses the persistence of European unemployment and argues that the phase during the 1990s can only be understood by changes in technology reducing demand for high-cost labor This is the basis of Exercise 15.27 below Caballero and Hammour (1999) provide an alternative and complementary explanation to that suggested here Acemoglu and Zilibotti (2001) discuss implications of directed technological change for cross-country income differences We have not dwelled on this topic here, since this will be discussed in greater detail in Chapter 19.5 in the context of appropriate technologies Acemoglu (2003b) suggested that increased international trade can cause endogenous skill-biased technological change Exercise 15.21 is based on this idea Variants of this story have been developed by Xu (2001), Gancia (2003), Thoenig and Verdier (2003) The model of long-run purely labor-augmenting technological change was first proposed in Acemoglu (2003a), and the model presented here is a simplified version of the model in the paper Similar ideas were discussed informally in Kennedy (1964) Jones (2005) presents an alternative model in which long-run technological change is labor augmenting The assumption that the elasticity of substitution between capital and labor is less than receives support from a variety of different empirical strategies The evidence is summarized in Acemoglu (2003a) The Habakkuk hypothesis has been widely debated in the economic history literature It was first formulated by Habakkuk (1962), though Rothbarth (1946) had anticipated these ideas almost two decades earlier David (1975) contains a detailed discussion of the Habakkuk hypothesis and potential theoretical explanations 697