Necessity is the Mother of Invention: Input Supplies and Directed Technical Change

@article{Hanlon2012NecessityIT,
  title={Necessity is the Mother of Invention: Input Supplies and Directed Technical Change},
  author={W. W. Hanlon},
  journal={Entrepreneurship & Economics eJournal},
  year={2012}
}
  • W. W. Hanlon
  • Published 2012
  • Economics
  • Entrepreneurship & Economics eJournal
  • This study provides causal evidence that a shock to the relative supply of inputs to production can (1) affect the direction of technological progress and (2) lead to a rebound in the relative price of the input that became relatively more abundant (the strong induced-bias hypothesis). I exploit the impact of the U.S. Civil War on the British cotton textile industry, which reduced supplies of cotton from the Southern United States, forcing British producers to shift to lower-quality Indian… CONTINUE READING
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