Technological Change, Output, Employment and Trade

Abstract

The discussion in Chapter 5 dealt mainly with the factors contributing to the origin of technological innovation. However, the real importance of innovation lies in its potential to generate greater wealth and better living conditions. Innovation can have these effects only after it has been adopted by some firms and institutions, and its overall effect on a given economy will depend on its degree of diffusion. In order to understand these effects of innovation the analysis in this chapter will move from the predominantly microeconomic level of analysis of Chapter 5 to higher levels of aggregation and will give more specific consideration to time patterns of economic development which are related to technological change.