Innovation, Job Creation and Economic Growth in the U.S.

Unemployment is caused by workers moving to new plants utilizing new technology. (“Creative destruction effect.”) (Aghion and Howitt, 1998) Considering the goodness of fit and estimation results, we can see that, in the past, the evidence is strongly in favor of the capitalization effect of growth on unemployment in the U.S. economy. However, the increase of the estimated random coefficient in the early 2000s shows also the offset effect of creative destruction. In addition, we can see the decreasing trends of those capitalization effects. Finally, we share a comm...