Factor-eliminating technical change
AbstractPerpetual growth requires offsetting diminishing returns to reproducible factors of production. In this article we present a theory of factor elimination. For simplicity and clarity, there is no augmentation of non-reproducible factors, thus excluding the standard engine of growth. By spending resources on R&D, agents learn to change the exponents of a Cobb–Douglas production function. We obtain the economy's balanced growth path and complete transition dynamics. The theory provides a mechanism for the transition from an initial technology incapable of supporting perpetual growth to one with constant returns to reproducible factors that supports it.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Monetary Economics.
Volume (Year): 60 (2013)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/505566
Other versions of this item:
- JOhn Seater & Pietro Peretto, 2010. "Factor-Eliminating Technical Change," Working Papers 10-67, Duke University, Department of Economics.
- John J. Seater & Pietro Peretto, 2007. "Factor-Eliminating Technical Change," 2007 Meeting Papers 272, Society for Economic Dynamics.
- Pietro F. Peretto & John J. Seater, 2010. "Factor-Eliminating Technical Change," Working Papers 10-21, Duke University, Department of Economics.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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