IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v13y1999i2p193-206.html
   My bibliography  Save this article

Biased Technical Change and the Aggregate Production Function

Author

Listed:
  • Thomas Michl

Abstract

This paper offers a classical model of biased technical change in the MarxRicardo tradition as a framework for theoretical and applied studies of growth. The observable data it generates would appear to an unsuspecting economist to be well-described by a neoclassical model with a static Cobb-Douglas production function, when in fact this production function describes only the technological history of the economy. The CobbDouglas form results from the capital-using, labour-saving bias of technical change. The model's trajectory in wage-profit space will lie along the displaced image of the neoclassical factor price frontier, in contradiction to marginal productivity theory. The Solow residual can be reinterpreted by the classical theory as a measure of the size of this displacement.

Suggested Citation

  • Thomas Michl, 1999. "Biased Technical Change and the Aggregate Production Function," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(2), pages 193-206.
    • Handle: RePEc:taf:irapec:v:13:y:1999:i:2:p:193-206
    DOI: 10.1080/026921799101652
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/026921799101652
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/026921799101652?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Decembrie.
    2. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    3. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676.
    4. Paul M. Romer, 1987. "Crazy Explanations for the Productivity Slowdown," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 163-210, National Bureau of Economic Research, Inc.
    5. Shaikh, Anwar, 1974. "Laws of Production and Laws of Algebra: The Humbug Production Function," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 115-120, February.
    6. Michl, Thomas R, 1991. "Wage-Profit Curves in U.S. Manufacturing," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 15(3), pages 271-286, September.
    7. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 193-206.
    8. Michael Bruno & Jeffrey D. Sachs, 1985. "Economics of Worldwide Stagflation," NBER Books, National Bureau of Economic Research, Inc, number brun85-1, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniele Tavani & Luca Zamparelli, 2017. "Endogenous Technical Change In Alternative Theories Of Growth And Distribution," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1272-1303, December.
    2. Daniele Tavani, 2023. "The Classical Model of Growth and Distribution," Working Papers 2311, New School for Social Research, Department of Economics.
    3. Anwar Shaikh, 2005. "Nonlinear Dynamics and Pseudo-Production Functions," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 447-466, Summer.
    4. Thomas R. Michl, 2007. "Capitalists, Workers And Social Security," Metroeconomica, Wiley Blackwell, vol. 58(2), pages 244-268, May.
    5. Deepankar Basu, 2017. "Quantitative Empirical Research In Marxist Political Economy: A Selective Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1359-1386, December.
    6. Pi, Jiancai & Zhang, Pengqing, 2018. "Structural change and wage inequality," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 699-707.
    7. Foley, Duncan K., 2003. "Endogenous technical change with externalities in a classical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 167-189, October.
    8. Thomas Michl, 2010. "Discounting Nordhaus," Review of Political Economy, Taylor & Francis Journals, vol. 22(4), pages 535-549.
    9. Luca Zamparelli, 2011. "Induced Innovation, Endogenous Growth, and Income Distribution: a Model along Classical Lines," Working Papers CELEG 1102, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    10. Tavani, Daniele & Zamparelli, Luca, 2021. "Labor-augmenting technical change and the wage share: New microeconomic foundations," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 27-34.
    11. Joao Paulo A. de Souza, 2014. "Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies," UMASS Amherst Economics Working Papers 2014-03, University of Massachusetts Amherst, Department of Economics.
    12. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data," Resource and Energy Economics, Elsevier, vol. 30(1), pages 50-65, January.
    13. Ali Raza Cheema & Attiya Yasmin Javid, 2015. "The Relationship between Disaggregate Energy Consumption, Economic Growth and Environment for Asian Developing Economies," PIDE-Working Papers 2015:115, Pakistan Institute of Development Economics.
    14. Dumenil, Gerard & Levy, Dominique, 2003. "Technology and distribution: historical trajectories a la Marx," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 201-233, October.
    15. zamparelli, luca, 2008. "Direction and intensity of technical change: a micro-founded growth model," MPRA Paper 10843, University Library of Munich, Germany.
    16. Luca Zamparelli, 2009. "Direction and Intensity of Technical Change: a Micro Model," Working Papers 4, Doctoral School of Economics, Sapienza University of Rome.
    17. Daniele Tavani, 2013. "Bargaining over productivity and wages when technical change is induced: implications for growth, distribution, and employment," Journal of Economics, Springer, vol. 109(3), pages 207-244, July.
    18. Fabrizio Ferretti, 2008. "Patterns of technical change: a geometrical analysis using the wage-profit rate schedule," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(5), pages 565-583.
    19. Joao Paulo A. de Souza, 2017. "Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(2), pages 151-172, March.
    20. Ekaterina Ponomareva & Alexandra Bozhechkova & Alexandr Knobel, 2012. "Factors of Economic Growth," Published Papers 172, Gaidar Institute for Economic Policy, revised 2013.
    21. Luiza Nassif Pires, 2020. "Notes on Intersectional Political Economy: The Long Period Method, Technical Change, and Gender," Economics Working Paper Archive wp_957, Levy Economics Institute.
    22. Deepankar Basu, 2010. "Marx‐Biased Technical Change And The Neoclassical View Of Income Distribution," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 593-620, November.
    23. A. J. Julius, 2005. "Steady‐State Growth And Distribution With An Endogenous Direction Of Technical Change," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 101-125, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    2. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2‐3), pages 208-262, May.
    3. Jan Mikael Malmaeus, 2016. "Economic Values and Resource Use," Sustainability, MDPI, vol. 8(5), pages 1-20, May.
    4. Jesus Felipe & Carsten Holz, 2001. "Why do Aggregate Production Functions Work? Fisher's simulations, Shaikh's identity and some new results," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(3), pages 261-285.
    5. Villar Otálora, Juan Camilo, 2021. "Una revisión sobre los métodos convencionales de la contabilidad del crecimiento: La tiranía de la identidad [A review of the conventional methods of growth accounting: The tyranny of identity]," MPRA Paper 106683, University Library of Munich, Germany.
    6. Kutuk, Yasin, 2022. "Inequality convergence: A world-systems theory approach," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 150-165.
    7. Christopher A. Pissarides, 2003. "Unemployment in Britain: A European Success Story," CESifo Working Paper Series 981, CESifo.
    8. Brainerd, Elizabeth & Siegler, Mark V, 2003. "The Economic Effects of the 1918 Influenza Epidemic," CEPR Discussion Papers 3791, C.E.P.R. Discussion Papers.
    9. Elmendorf, Douglas W. & Gregory Mankiw, N., 1999. "Government debt," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 25, pages 1615-1669, Elsevier.
    10. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    12. Odile Chagny & Frédéric Reynès & Henri Sterdyniak, 2002. "The equilibrium rate of unemployment : a theoretical discussion and an empirical evaluation for six OECD countries," SciencePo Working papers Main hal-01027421, HAL.
    13. Michaelides, Panayotis & Milios, John, 2009. "TFP change, output gap and inflation in the Russian Federation (1994-2006)," Journal of Economics and Business, Elsevier, vol. 61(4), pages 339-352, July.
    14. Carroll, Christopher D. & Weil, David N., 1994. "Saving and growth: a reinterpretation," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 133-192, June.
    15. Massimo Cingolani, 2015. "Sylos Labini su Marx: implicazioni per la politica economica (Sylos Labini on Marx: economic policy implications)," Moneta e Credito, Economia civile, vol. 68(269), pages 81-147.
    16. Dale W. Jorgenson, 2007. "Information Technology and the G7 Economies," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 325-350, National Bureau of Economic Research, Inc.
    17. Jonathan Temple, 1995. "Testing the augmented Solow Model," Economics Papers 18 & 106., Economics Group, Nuffield College, University of Oxford.
    18. Hong Li & Zinan Liu & Ivonia Rebelo, 1998. "Testing the Neoclassical Theory of Economic Growth: Evidence from Chinese Provinces," Economic Change and Restructuring, Springer, vol. 31(2), pages 117-132, May.
    19. Martin Zagler, 2011. "Endogenous Growth, Efficiency Wages, and Persistent Unemployment," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 34-42, April.
    20. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:13:y:1999:i:2:p:193-206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.