Global Technology Stagnation

In the last two decades, economic growth has slowed down across developed countries. This paper investigates the role of technology specific to durable consumption and equipment goods in this global slowdown. We present evidence that technological stagnation in these sectors has prevailed globally over the past two decades. Using an extended Ramsey growth model as an accounting device, we find that this global technology stagnation can substantially account for the economic slowdown across developed countries through the capital deepening effect, rather than TFP.