Directed technological change: It's all about knowledge
AbstractDirected technological change concerns how stocks of factor-augmenting knowledge evolve relative to each other. In a simple framework we show that relative investment rates depend directly on the relative factor shares, and that the resulting evolution of the economy depends on the substitutability between the factors and the nature of the links between the knowledge stocks. We thus generalize and reinterpret existing results. Furthermore, we propose a novel model of spillovers between stocks of factor-augmenting knowledge which results in multiple equilibria when the factors are substitutes. This may have profound implications for the modelling of technological transitions\m such as from `dirty' to `clean' technology, or from low-skill/low-tech to high-skill/high-tech production systems\m and hence for modelling long-run economic change in general.
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Bibliographic InfoPaper provided by Department Economics, Swedish University of Agricultural Sciences in its series Working Paper Series with number 2012:02.
Length: 19 pages
Date of creation: 04 May 2012
Date of revision:
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Growth; directed technological change; knowledge spillovers.;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-INO-2012-11-11 (Innovation)
- NEP-KNM-2012-11-11 (Knowledge Management & Knowledge Economy)
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