David Hémous analyzes how innovation shapes long-term economic trends and how policies can affect innovation. In particular, he studies the role of innovation in the design of climate policies. How to control and limit climate change caused by our consumption of fossil fuels is one of the most pressing policy challenges facing the world today. While policymakers and climate scientists regularly emphasize the need to develop green technologies, economists have often ignored the role of endogenous innovation in the design of climate change policies and computed optimal carbon taxes accordingly. In his research, David sheds light on this issue by building theoretical economic models, evaluating them quantitatively and testing empirically their underlying assumptions on firm level data. His work emphasizes that innovation reacts strongly to policy and that climate policies should aim at redirecting innovation toward clean technologies.
Hémous also looks at the role played by innovation in the recent increase in income inequality. Rapid technological progress in IT, robotics or self-driving cars have heightened concerns that automation will lead to more inequality. Here as well, the economic literature has often viewed technological progress in automation as an exogenous event. Yet, in his research, Hémous shows that as an economy develops and wages increase, innovation becomes naturally more directed toward automation, which can account for the rise in the skill premium quantitatively. He also confirms empirically with patent data, that automation innovations increase with higher low-skill wages. This matters from a policy standpoint, because policy interventions have different long-term effects depending on whether automation is endogenous or exogenous.
Relatedly, developed economies have also experienced an increase in the share of income going to the top 1%. If this increase were to result from an increase in rents (through inheritance or a decline in competition), a strong policy response would be warranted. Hémous shows, however, that an increase in patented innovations is also in part responsible for the rise in the top 1% share.
David Hémous analyzes how innovation shapes long-term economic trends and how policies can affect innovation. In particular, he studies the role of innovation in the design of climate policies. How to control and limit climate change caused by our consumption of fossil fuels is one of the most pressing policy challenges facing the world today. While policymakers and climate scientists regularly emphasize the need to develop green technologies, economists have often ignored the role of endogenous innovation in the design of climate change policies and computed optimal carbon taxes accordingly. In his research, David sheds light on this issue by building theoretical economic models, evaluating them quantitatively and testing empirically their underlying assumptions on firm level data. His work emphasizes that innovation reacts strongly to policy and that climate policies should aim at redirecting innovation toward clean technologies.
Hémous also looks at the role played by innovation in the recent increase in income inequality. Rapid technological progress in IT, robotics or self-driving cars have heightened concerns that automation will lead to more inequality. Here as well, the economic literature has often viewed technological progress in automation as an exogenous event. Yet, in his research, Hémous shows that as an economy develops and wages increase, innovation becomes naturally more directed toward automation, which can account for the rise in the skill premium quantitatively. He also confirms empirically with patent data, that automation innovations increase with higher low-skill wages. This matters from a policy standpoint, because policy interventions have different long-term effects depending on whether automation is endogenous or exogenous.
