An Analysis of the Source and Nature of Technical Change: The Case of U.S. Agriculture

Abstract

This paper proposes a methodology to investigate the process of technical change with a focus on the dynamic effects of R&D investments on productivity, and on the induced innovation hypothesis for both inputs and outputs. The approach builds on a nonparametric representation of the underlying technology. An application to U.S. agriculture is presented. By distinguishing between private and public R&D investments, the analysis provides useful insights into the source and the dynamic nature of technical progress. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology