Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 19

Innovation often requires "creative destruction," in which the new product or technology makes previous products or technologies obsolete. For example, when the personal computer was invented, typewriters became useless; hence, the personal computer "destroyed" the typewriter. This process of creative destruction often results in structural unemployment because workers who knew how to build and maintain the old products have skills that are no longer in demand. Do you think the government has a role in either limiting how often new products are created or in helping those workers who are displaced because of the new product?