KAEA Macro VSS
Time: Thursday, Nov 10 8:00PM Eastern Time (10:00AM Friday in Korea)
Speaker: Hyejin Park (University of Montreal)
“Does Growth Lead to Labor Reallocation? Role of Own-Product Improvement vs. Product Expansion”
I study the relationship between long-run growth and labor reallocation when incumbent producers both innovate over their previous products (own-product improvements) and expand to new product markets (product expansion). I calibrate a quality ladder model of endogenous growth with an establishment panel survey data that distinguish different innovation types. I discover that own-product improvements account for 90% of the steady-state productivity growth and 81% of the welfare gains from faster growth after R&D incentives. Since own-product improvements have smaller effects to reallocate labor between establishments, despite an increase in growth rates, labor reallocation rates barely change in response to R&D incentives.
Meeting ID: 935 5843 7006