The paper develops a Bayesian cluster identification model to estimate the innovation pos- sibilities frontier of the OECD economies based on the probabilistic Induced Technical Change (ITC) model, a generalized version of the canonical ITC model stemming from Von Weizsäcker (2010) and Kennedy (1964). The result shows that there are multiple distinctive frontiers in the OECD economies from 1968-2009, each of which is associated with a class of economies whose technical conditions exhibit a distinctive pattern. It is observed that advanced economies with a high “level” of labor productivity and low capital productivity along with a high labor cost tend to have a low rate of cost reduction, the result from a low growth rate of labor and capital productivity. The result explains a stylized fact of economic development of advanced economies from a low-wage, labor-intensive economy to a high-wage, capital-intensive economy.
Other Recent Journal Article / Working Papers
Oral History: Embedding lived experience into mind brain health
Deep learning and single-cell phenotyping for rapid antimicrobial susceptibility detection in Escherichia coli
The effect of immunomodulatory drugs on aortic stenosis: a Mendelian randomisation analysis
Nature-based solutions are critical for putting Brazil on track towards net-zero emissions by 2050
To share or not to share? The impact of mobile network sharing for consumers and operators
Flagship individuals in biodiversity conservation