Economics of Technological Change
The other focal area for Rensselaer's department of economics is technological change, the dynamic process at the root of economic growth. The bulk of economic growth - 87.5% according to Nobelist Robert Solow's (1957) initial estimates, stems from technological change: improvements in efficiency and effectiveness of industry. And Solow's estimates do not even correct for the "hedonic" price changes needed to account for improvements in products' features and quality, nor for the development of new goods and services. To understand how to achieve the kinds and amount of economic growth we desire, we must understand technological change and its role in the industries where it occurs.
Technological change has many facets. Technological change includes, as well as creation of new products, quality improvement and efficiency gains for existing products. Cars, lighting, computers, software - these and in fact nearly all products have been improving in quality while their manufacturing costs remain constant or decreasing; the economy is improving. Knowledge diffuses across countries and regions, between industries and companies, across universities and researchers. Employees learn the skills that help with current generations of technology, and those skills similarly spread geographically and between people. The processes of technology creation in scientific teams and in companies' plant-floor work teams determine how quickly new technology emerges. Technological success brings a financial reward to companies, which - if they keep succeeding ahead of the competitors - increase their market share. Companies' sizes and traits in turn affect the types and amounts of their innovation, affecting technological progress. These and other matters must be understood, to be able to design appropriate policy, to understand industry competition, to understand growth.
Rensselaer's Economics department brings together a world-class group of researchers on these issues. Together our team is making strides in understanding all of the above issues. The faculty involved edit journals, organize large numbers of conferences, present their work at the leading economics conferences, and publish in the most prestigious of outlets for economics papers. See the overview of our department, and individual faculty members' web pages, for more details.
Students are encouraged to contact us about courses, the Ph.D. program, and research opportunities. At Rensselaer, we are geographically well-positioned to build on the strengths and industrial contacts of a premier technological university. Science and engineering backgrounds, as well as traditional economics backgrounds, are good starting points for work on the economics of technology and industry.