This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 103 No. 1 (February 2013)

AER Volume. 103, Issue 1 | leftPrevious ArticleNext Articleright

Expand

Quick Tools:

Print Article Summary Email Link to this Article Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Technological Diversification

Article Citation

Koren, Miklós, and Silvana Tenreyro. 2013. "Technological Diversification." American Economic Review, 103(1): 378-414.

DOI: 10.1257/aer.103.1.378

Abstract

Economies at early stages of development are frequently shaken by large changes in growth rates, whereas advanced economies tend to experience relatively stable growth rates. To explain this pattern, we propose a model of technological diversification. Production makes use of input-varieties that are subject to imperfectly correlated shocks. Endogenous variety adoption by firms raises average productivity and provides diversification benefits against variety-specific shocks. Firm-level and aggregate volatility thus decline as a by-product of the development process. We quantitatively assess the model's predictions and find that it can generate patterns of volatility and development consistent with the data. (JEL D21, D24, E23, O33, O47)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (850.70 KB) | Online Appendix (432.12 KB)

Authors

Koren, Miklós (Central European U, Budapest)
Tenreyro, Silvana (CEP, London School or Economics and Political Science)

JEL Classifications

D21: Firm Behavior: Theory
D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
E23: Macroeconomics: Production
O33: Technological Change: Choices and Consequences; Diffusion Processes
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence


American Economic Review



AEA Member Login:


Quick Tools:

Email Link to this Issue

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

AEA Journals

Virtual Field Journals

AEAweb | AEA Journals | Contact Us