Technological complexity and economic growth

The last fifty years have witnessed large secular increases in educational attain-ment and R&D intensity. The fact that these trends have not stimulated more rapid income growth has been a persistent puzzle for growth theorists. We con-struct a model of endogenous economic growth in which income growth, R&D in-tensity, and educational attainment depend on the complexity of new technologies. An increase in complexity that makes passive learning more difficult, induces in-creases in R&D and education, alongside a decline in income growth. Our expla-nation also predicts a concurrent rise in the skill premium