The increase in equity prices over the 1990s has to a large degree been attributed to permanently higher productivity growth that is derived from the ‘new economy’ and related research and development (R&D) expenditures. This paper establishes a rational expectations model of technology innovations and equity prices, which shows that under plausible assumptions, productivity advances can only h...

Aggregate productivity falls in recessions and rises in expansions. Several empirical studies suggest that the systematic behavior of lending standards, with laxer (tighter) standards applied during expansions (recessions), is responsible for reverting trends in aggregate productivity. We build a dynamic model that rationalizes these findings. Higher liquidity brought about by high levels of ca...

In this paper, we develop a model of the engaged organization, which shows how human capital can interact with social and green capital to influence organizational outcomes, particularly labor productivity. We argue that engaged organizations, that facilitate knowledge sharing and learning, employee motivation and commitment to the organization, can demonstrate increased labor productivity. We ...

When we allow capital depreciation to be endogenous, the acceleration of investment-specific technological progress can distort the measurement of the aggregate capital stock. Our quantitative exercise shows that this effect may cause a substantial bias in the measurement of total factor productivity and can account for a large portion of the observed productivity slowdown since the 1970s. 2006...

The rapid pace of productivity growth since the mid-1990s has been attributed to improvements in technology, particularly in the areas of information processing and communications. From e-mail and cell phones to inventory management and robotic manufacturing techniques, new ways of doing business—facilitated by the use of new types of capital equipment—have transformed the workplace. However, t...

In the model where the choice of technology by firms endogenously determines productivity differences, we investigate the link between factor endowment and the productivity both in the firm and industry levels. We find among others that firms in capital-abundant countries tend to adopt new advanced technologies more in their production processes, but opening to international trade will equalize...