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Self-published

Code for: Regulating Transformative Technologies (ICPSR 196262)

Released/updated on: 2024-07-30
Code repository: Acemoglu, D. and Lensman, T. 2023. "Regulating Transformative Technologies."

Contents: Contains all code needed to replicate figures (main text and online appendix).

Abstract: Transformative technologies like generative AI promise to accelerate productivity growth across many sectors, but they also present new risks from potential misuse. We develop a multi-sector technology adoption model to study the optimal regulation of transformative technologies when society can learn about these risks over time. Socially optimal adoption is gradual and typically convex. If social damages are large and proportional to the new technology’s productivity, a higher growth rate paradoxically leads to slower optimal adoption. Equilibrium adoption is inefficient when firms do not internalize all social damages, and sector-independent regulation is helpful but generally not sufficient to restore optimality.
Self-published

Data and Code for: Advanced Technology Adoption: Selection or Causal Effects? (ICPSR 187861)

Released/updated on: 2023-05-22
Time period: 1976-01-01--2019-01-01
This paper studies the employment dynamics for firms that adopt advanced technologies versus firms that do not. The findings suggest that firms that adopt advanced technologies are different from those that do not in terms of their size and growth patterns. Prior to the time period during which the adoption of advanced technologies intensified, these firms were larger and grew faster. However, the adoption of advanced technologies did not lead to significant changes in their employment and growth patterns. These findings suggest that adoption is driven more by selection and have implications on how we assess the impacts of advanced technology adoption on firm performance. 
Self-published

Data and code for: "Distorted Innovation: Does the Market Get the Direction of Technology Right?" (ICPSR 184829)

Released/updated on: 2023-05-18
In the presence of markup differences, externalities and other social considerations, the equilibrium direction of innovation can be systematically distorted. This paper builds a simple model of endogenous technology, which generalizes existing comparative static results and characterizes potential distortions in the direction of innovation. I show that empirical findings across a number of different areas are consistent with this framework's predictions and I use data from several studies to estimate its key parameters. Combining these numbers with rough estimates of differential externalities and markups, I provide suggestive evidence that equilibrium distortions in the direction of technology can be substantial in the context of industrial automation, health care, and energy, and correcting these distortions could have sizable welfare benefits.
Self-published

Data and Code for: Optimal Targeted Lockdownsin a Multi-Group SIR Model (ICPSR 130626)

Released/updated on: 2021-11-23
This is the code repository for "Optimal Targeted Lockdowns in a Multi-Group SIR Model", (AER Insights: Revision). 

DATA  

The fatality parameters used in computation are based on Ferguson, NM, D. Laydon, G. Nedjati-Gilani, N. Imai, K Ainslie, M. Baguelin, S. Bhatia, A. Boonyasiri, Z. Cucunubá, G. Cuomo-Dannenburg, and A. Dighe, “Impact of non-pharmaceutical interventions (NPIs) to reduce COVID-19 mortality and healthcare demand,” March 2020. Imperial College COVID-19 Response Team.  As commented in the paper, these parameters are in line with those from South Korea and the Diamond Princess cruise (see Acemoglu D., V. Chernozhukov, I. Werning, and M. D. Whinston, “A multi-risk SIR model with optimally targeted lockdown,” Technical Report, National Bureau of Eco- nomic Research 2020, for details and discussion).  The latter data is not used in the paper.


COMPUTATIONAL CODE FILES.  

The code files are the Python Notebooks: 

Optimal3GPolicy-v6.ipynb produces  Figures 3, 4, 5, A1, A3, A4, A5.2.   
Optimal3G-SEIR-v6.ipynb produces Figures A6 an A8.3.   
Optimal4GPolicy-OldWorking-v6.ipynb produces Figure A2.4.   
Optimal3G-CustomContactMatrix.ipynb produces Figure A7. 

The code is available under a Creative Commons Non-commercial license. 

EXECUTION 

We executed the files as follow: We have uploaded these notebooks to Google Colab Cloud https://colab.research.google.com/  and executed them online in the cloud.

To execute the code, the user can follow a similar approach. The user will need to modify the notebook cell that mounts the Google drive and supply her our own default paths for where to store computational output, figures: The path "/content/drive/My Drive/Covid/Lockdown/" has to be modified to user’s working folder. In that folder, the user must create the following subfolders: models/, figs/, summaryres/, results/. This is needed to make sure that the code executes properly. Alternatively, the code can be executed on a local machine with a local Python installation. 
REQUIREMENTS

We used Google Colab Cloud https://colab.research.google.com/ with default runtime hardware setting  to execute the notebooks.    

Execution via local installation will require Python 3.6.1 or higher and Gekko Optimization suite (ver 1.1.0; see https://gekko.readthedocs.io/en/latest/ ).    
 
ALTERNATIVE SUGGESTED EXECUTION 

The Python notebooks can be accessible online directly at: 

https://colab.research.google.com/drive/16zhsso-NzNbxn9C_MMP4lqzdVA2N-xxt?usp=sharing https://colab.research.google.com/drive/1Ogi15qeU0vVm1eUq66c3B7M1nPiL-ZtE?usp=sharinghttps://colab.research.google.com/drive/15RYgCU6esEdOfOSA6LK7kRV5BZmQmVD3?usp=sharing https://colab.research.google.com/drive/1AvOOsR_3w-r0eciToP758dLkQRdSVm6H?usp=sharing    

They can be cloned and executed directly in Google Colab Cloud.   
Self-published

Data and Code for: Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators (ICPSR 125161)

Released/updated on: 2022-06-24
This is the data and code for "Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators".

Abstract: This paper investigates the determinants of radical (“creative”) innovations – innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of different ages and human capital are sorted across different types of firms, we provide firm-level and patent-level evidence that firms that are more open to hiring younger managers (those that are more “open to disruption”) are significantly more likely to engage in radical innovation. Our measures of radical innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). We present robust evidence that firms that have a comparative advantage in new innovations (e.g., because they are more open to disruption) generate more creative innovations, but we also show that once the effect of the sorting of young managers to such firms is factored in, the (causal) impact of manager age on creative innovations, though positive, is small.
Self-published

Replication data for: Automation and New Tasks: How Technology Displaces and Reinstates Labor (ICPSR 114030)

Released/updated on: 2019-10-12
We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production—due to automation and new tasks—can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades.
Self-published

Replication data for: Income and Democracy (ICPSR 113251)

Released/updated on: 2019-10-12
Existing studies establish a strong cross-country correlation between income and democracy but do not control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and various measures of democracy. We present instrumental-variables estimates that also show no causal effect of income on democracy. The cross-country correlation between income and democracy reflects a positive correlation between changes in income and democracy over the past 500 years. This pattern is consistent with the idea that societies embarked on divergent political-economic development paths at certain critical junctures.
Self-published

Replication data for: Innovation, Reallocation, and Growth (ICPSR 231364)

Released/updated on: 2025-05-29
We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms.
Self-published

Replication data for: Microeconomic Origins of Macroeconomic Tail Risks (ICPSR 113084)

Released/updated on: 2019-10-12
Using a multisector general equilibrium model, we show that the interplay of idiosyncratic microeconomic shocks and sectoral heterogeneity results in systematic departures in the likelihood of large economic downturns relative to what is implied by the normal distribution. Such departures can emerge even though GDP fluctuations are approximately normally distributed away from the tails, highlighting the different nature of large economic downturns from regular business-cycle fluctuations. We further demonstrate the special role of input-output linkages in generating tail comovements, whereby large recessions involve not only significant GDP contractions, but also large simultaneous declines across a wide range of industries.
Self-published

Replication data for: Offshoring and Directed Technical Change (ICPSR 114079)

Released/updated on: 2019-10-12
We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers. (JEL J24, J31, L24, O33)
Self-published

Replication data for: Productivity Differences between and within Countries (ICPSR 114164)

Released/updated on: 2019-10-12
We document substantial within-country (cross-municipality) differences in incomes for a large number of countries in the Americas. A significant fraction of the within-country differences cannot be explained by observed human capital. We conjecture that the sources of within-country and between-country differences are related. As a first step toward a unified framework, we propose a simple model incorporating differences in technological know-how across countries and differences in productive efficiency within countries. (JEL E23, I31, J31, O15, O18, O47, R23)
Self-published

Replication data for: Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing (ICPSR 112803)

Released/updated on: 2019-10-11
An increasingly influential "technological-discontinuity" paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using US manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and to our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.
Self-published

Replication data for: State Capacity and Economic Development: A Network Approach (ICPSR 112972)

Released/updated on: 2019-10-12
We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger. (JEL D85, H41, H77, O17, O18)
Self-published

Replication data for: The Colonial Origins of Comparative Development: An Empirical Investigation: Reply (ICPSR 112564)

Released/updated on: 2019-10-11
Acemoglu, Johnson, and Robinson (2001) established that economic institutions today are correlated with expected mortality of European colonialists. David Albouy argues this relationship is not robust. He drops all data from Latin America and much of the data from Africa, making up almost 60 percent of our sample, despite much information on the mortality of Europeans in those places during the colonial period. He also includes a "campaign" dummy that is coded inconsistently; even modest corrections undermine his claims. We also show that limiting the effect of outliers strengthens our results, making them robust to even extreme versions of Albouy's critiques. (JEL D02, E23, F54, I12, N40, O43, P14)
Self-published

Replication data for: The Consequences of Radical Reform: The French Revolution (ICPSR 112481)

Released/updated on: 2019-10-11
The French Revolution had a momentous impact on neighboring countries. It removed the legal and economic barriers protecting oligarchies, established the principle of equality before the law, and prepared economies for the new industrial opportunities of the second half of the 19th century. We present within-Germany evidence on the long-run implications of these institutional reforms. Occupied areas appear to have experienced more rapid urbanization growth, especially after 1850. A two-stage least squares strategy provides evidence consistent with the hypothesis that the reforms instigated by the French had a positive impact on growth. (JEL: N13, N43, O47)
Self-published

Replication data for: The Environment and Directed Technical Change (ICPSR 112489)

Released/updated on: 2019-10-11
This paper introduces endogenous and directed technical change in a growth model with environmental constraints. The final good is produced from "dirty" and "clean" inputs. We show that: (i) when inputs are sufficiently substitutable, sustainable growth can be achieved with temporary taxes/subsidies that redirect innovation toward clean inputs; (ii) optimal policy involves both "carbon taxes" and research subsidies, avoiding excessive use of carbon taxes; (iii) delay in intervention is costly, as it later necessitates a longer transition phase with slow growth; and (iv) use of an exhaustible resource in dirty input production helps the switch to clean innovation under laissez-faire. (JEL O33, O44, Q30, Q54, Q56, Q58)
Self-published

Replication data for: The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment (ICPSR 113138)

Released/updated on: 2019-10-12
We examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks, in which labor has a comparative advantage, can be created. In a static version where capital is fixed and technology is exogenous, automation reduces employment and the labor share, and may even reduce wages, while the creation of new tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research toward automation and the creation of new tasks. If the long-run rental rate of capital relative to the wage is sufficiently low, the long-run equilibrium involves automation of all tasks. Otherwise, there exists a stable balanced growth path in which the two types of innovations go hand-in-hand. Stability is a consequence of the fact that automation reduces the cost of producing using labor, and thus discourages further automation and encourages the creation of new tasks. In an extension with heterogeneous skills, we show that inequality increases during transitions driven both by faster automation and the introduction of new tasks, and characterize the conditions under which inequality stabilizes in the long run.
Self-published

Replication data for: The Rise and Decline of General Laws of Capitalism (ICPSR 113943)

Released/updated on: 2019-10-12
Thomas Piketty's (2013) book, Capital in the 21st Century, follows in the tradition of the great classical economists, like Marx and Ricardo, in formulating general laws of capitalism to diagnose and predict the dynamics of inequality. We argue that general economic laws are unhelpful as a guide to understanding the past or predicting the future because they ignore the central role of political and economic institutions, as well as the endogenous evolution of technology, in shaping the distribution of resources in society. We use regression evidence to show that the main economic force emphasized in Piketty's book, the gap between the interest rate and the growth rate, does not appear to explain historical patterns of inequality (especially, the share of income accruing to the upper tail of the distribution). We then use the histories of inequality of South Africa and Sweden to illustrate that inequality dynamics cannot be understood without embedding economic factors in the context of economic and political institutions, and also that the focus on the share of top incomes can give a misleading characterization of the true nature of inequality.
Self-published

Replication data for: The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth (ICPSR 116047)

Released/updated on: 2019-12-06
The rise of Western Europe after 1500 is due largely to growth in countries with access to the Atlantic Ocean and with substantial trade with the New World, Africa, and Asia via the Atlantic. This trade and the associated colonialism affected Europe not only directly, but also indirectly by inducing institutional change. Where "initial" political institutions (those established before 1500) placed significant checks on the monarchy, the growth of Atlantic trade strengthened merchant groups by constraining the power of the monarchy, and helped merchants obtain changes in institutions to protect property rights. These changes were central to subsequent economic growth.
Self-published

Replication package for: The Perils of High-Powered Incentives: Evidence from Colombia's False Positives (ICPSR 111542)

Released/updated on: 2020-07-23
Time period: 2000-01-01--2010-01-01
We investigate the use of high-powered incentives for Colombian army members, and show that it produced several perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as ‘false positives’). There were significantly more false positives during the period of high- powered incentives in municipalities with weaker judicial institutions and where a higher share of brigades were commanded by colonels (who have stronger career concerns than generals). In municipalities with a higher share of colonels, the high-powered incentives period also coincided with a worsening of local judicial institutions and no discernible improvement in overall security.