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Tasks, technology, and factor prices in the neoclassical production sector

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  • Andreas Irmen

    (University of Luxembourg
    CESifo, Munich)

Abstract

This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies. We show that the effect of factor-augmenting technical change on relative and absolute factor prices can be decomposed into a productivity effect and a task-demand effect of opposite sign. These effects appear since the novel task-based approach distinguishes between the demands for tasks and the demands for factors. This perspective provides a new intuition for the emergence of relative and absolute factor biases and the role of the elasticity of substitution.

Suggested Citation

  • Andreas Irmen, 2020. "Tasks, technology, and factor prices in the neoclassical production sector," Journal of Economics, Springer, vol. 131(2), pages 101-121, October.
    • Handle: RePEc:kap:jeczfn:v:131:y:2020:i:2:d:10.1007_s00712-020-00705-9
    DOI: 10.1007/s00712-020-00705-9
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    References listed on IDEAS

    as
    1. Andreas Irmen, 2020. "Tasks, technology, and factor prices in the neoclassical production sector," Journal of Economics, Springer, vol. 131(2), pages 101-121, October.
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    9. Irmen, Andreas & Tabaković, Amer, 2017. "Endogenous capital- and labor-augmenting technical change in the neoclassical growth model," Journal of Economic Theory, Elsevier, vol. 170(C), pages 346-384.
    10. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    11. Andreas Irmen, 2017. "Capital‐ And Labor‐Saving Technical Change In An Aging Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 261-285, February.
    12. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, December.
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    Cited by:

    1. Oscar Afonso & Tiago Sequeira & Derick Almeida, 2023. "Technological knowledge and wages: from skill premium to wage polarization," Journal of Economics, Springer, vol. 140(2), pages 93-119, October.
    2. Andreas Irmen, 2020. "Tasks, technology, and factor prices in the neoclassical production sector," Journal of Economics, Springer, vol. 131(2), pages 101-121, October.

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    More about this item

    Keywords

    Technical change; Factor prices; Factor-specific tasks; Neoclassical production;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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