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...

We construct an endogenous growth model with automation and horizontal innovation in an economy with low- and high-skill workers. Automation enables the replacement of low-skill workers with machines, increasing the skill premium and possibly decreasing low-skill wages. Horizontal innovation...

Innovation is part idea generation and part development. We build a model of "innovating-by-doing," whereby ideas come to practitioners. Successful innovation requires that practitioners' ideas be developed through costly effort. Our model nests existing theories of laboratory research and...