Directed Technical Change in Labor and Environmental Economics

It is increasingly evident that the direction of technological change responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and we show that these fields have much in common both theoretically and empiric...

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Bibliographic Details
Published in:Annual review of economics 2021-01, Vol.13 (1), p.571-597
Main Authors: Hémous, David, Olsen, Morten
Format: Article
Language:English
Subjects:
automation
climate change
directed technical change
endogenous growth
Environmental economics
income inequality
JEL E25
JEL J24
JEL O31
JEL O33
JEL O41
JEL O44
JEL Q55
Labor economics
Literature reviews
Technological change
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Summary:It is increasingly evident that the direction of technological change responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and we show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path and show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and to growing inequality in labor economics. We discuss whether the direction of innovation is efficient.
ISSN:1941-1383
1941-1391
DOI:10.1146/annurev-economics-092120-044327