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Biased technological change, human capital and factor shares

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  • Hernando Zuleta

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Abstract

We propose a one-good model where technological change is factor saving and costly. We consider a production function with two reproducible factors: physical capital and human capital, and one not reproducible factor. The main predictions of the model are the following: (a) The elasticity of output with respect to the reproducible factors depends on the factor abundance of the economies. (b) The income share of reproducible factors increases with the stage of development. (c) Depending on the initial conditions, in some economies the production function converges to AK, while in other economies long-run growth is zero. (d) The share of human factors (raw labor and human capital) converges to a positive number lower than one. Along the transition it may decrease, increase or remain constant.

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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 004380.

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Length: 29
Date of creation: 25 Apr 2007
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Handle: RePEc:col:000092:004380

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Cited by:
  1. Hernando Zuleta, 2007. "Biased innovations in the Harrod-Domar model," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.

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