Working Paper No. 294: Technological Change and Wage Polarization – The Illiberal Populist Response

Abstract

The purpose of this paper is to discuss populist actions that are expected follow technological change on the labor market.1 The causes and consequences of possible technological unemployment will be addressed and to what extent it could be expected that the rapid technological change leads to unemployment (or that the labor market adapts in a similar way to previous technological changes as has been seen in history so far). A transforming labor market will constitute challenges for the future – possible wage polarization and heterogeneous distribution of unemployment in the labor force might create a demand for policy solutions that have an illiberal direction. In the paper it will be argued that the threat of populism will come from a disgruntled middle class rather than as commonly believed the poorer strata of the wage distribution.

Government support to renewable energy R&D: drivers and strategic interactions among EU Member States

Article (with peer review)Publication

Grafström, J., Söderholm, P., Gawel, E., Lehmann, P., & Strunz, S.

Publication year

2023

Published in

Economics of Innovation and New Technology, 32(1), 1-24.

Abstract

Although the climate challenge requires proactive policies that spur innovation in the renewable energy sector, various countries commit vastly different levels of support for renewable energy R&D. This paper addresses the question why this may be the case. Specifically, the objective is to analyse the determinants of government support to renewable energy R&D in the European Union (EU), and, in doing this, we devote particular attention to the question of whether the level of this support tends to converge or diverge across EU Member States. The investigation relies on a data set of 12 EU Member States and a bias-corrected dynamic panel data estimator. We test for the presence of conditional β-convergence, and the impacts of energy dependence and electricity regulation on government R&D efforts. The findings display divergence in terms of government support to renewable energy R&D, and this result is robust across various model specifications and key assumptions. The analysis also indicates that countries with a low energy-import dependence and deregulated electricity markets tend to experience lower growth rates in government renewable energy R&D. The paper ends by discussing some implications of the results, primarily from an EU perspective.

The article can be accessed here.

No evidence of counteracting policy effects on European solar power invention and diffusion

Article (with peer review)Publication

Grafström, J., & Poudineh, R.

Publication year

2023

Published in

Energy Policy, 172, 113319.

Abstract

In this paper, the questions of how support policies affect invention and diffusion of solar PV technology and whether the effect is heterogeneous and counteracting are investigated in order to help policy makers produce a better policy mix. The policies (and policy proxies) investigated are Feed-in-tariffs (FITs), Public R&D stock and flow, Environmental tax, and Environmental Policy Stringency Index. The policies are within the control of national government and no EU level policies are investigated. Evaluating policies on several dimensions is highly important since there is a risk that policies can promote one aspect of technological progress such as invention but derail diffusion. A Schumpeterian technological development approach is utilised on a panel dataset covering 23 European countries between 2000 and 2019. Two econometric approaches are employed, a negative binomial regression model is used to assess inventions and a panel data fixed effect regression is used for the diffusion model. The empirical findings suggest that no counteracting policy effects were present.

Less from More: China Built Wind Power, but Gained Little Electricity

Book chapterPublication

Grafström, J.

Publication year

2022

Published in

Questioning the Entrepreneurial State, 219.

Abstract

This chapter investigates Chinese wind power development and concludes that innovation cannot be pushed by the efforts of many, and that when the state clarifies directions and objectives, these can be achieved but with severe and unexpected side effects. Two topics are explored: wind curtailment and low technological development, both examples of unproductive entrepreneurship induced by government policies. The goal of wind power capacity expansion leads to construction (i.e., generation capacity) but little electricity. Examples of failures include low grid connectivity with, some years averaging 15% of generation capacity broken or unconnected to the grid. A key lesson for Europe is that forced innovation often amounts to little and that the old saying holds up: “no plan survives contact with reality.”

The book can be downloaded here.

Working Paper No. 294: Technological Change and Wage Polarization – The Illiberal Populist Response

jg_technological_change_wage_polarization_294

Abstract

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Government support to renewable energy R&D: drivers and strategic interactions among EU Member States

No evidence of counteracting policy effects on European solar power invention and diffusion

Less from More: China Built Wind Power, but Gained Little Electricity