James D. Adams
Professor of Economics
Welcome to this web site on the economics of technological change. I hope that you will find this subject as fascinating as I have over the years.
Technological change is important because it is responsible for economic growth. Technological change, consisting of an expanding store of useful ideas, allows the economy to produce more output from the same amount of labor and other factors of production. This growth of output over and above the growth of labor and so on, is called Total Factor Productivity or TFP. Growth of TFP is a useful measure of economic growth, and over the long run technological change is reflected in growth of TFP.
Technological change also stimulates the growth of education and skill per person, often called human capital. Likewise, technological change leads to improvements in capital that raise the quality of capital.
For all these reasons, technological change is at the center of economic growth. It explains how the world grows and prospers. If invention and innovation become more profitable, income per person will double more rapidly. Using a commonly employed illustration, at a one percent rate of growth of income per person, that will double in 69 years. But at a three percent growth rate, income per person will grow in 23 years. This is why encouraging technological change is so important.
This web site reports on my own research and that of others in this amazing field of study.