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The Development Problem Under Embodiment

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  • Raouf Boucekkine

    ()
    (IRES)

  • Blanca Martínez

    (Universidad de Alicante)

  • CARGI SAGLAM

    (IRES)

Abstract

We study technology adoption in an optimal growth model with embodied technical change. The economy consists of the final good sector, the capital sector, and the technology sector which role is the imitation of exogenous innovations. Labor resources are scarce. They are freely allocated to the technology and final good sectors. The final good is freely allocated to consumption and to the capital sector. We analytically characterize the optimal allocation decisions in the long run. Using a calibrated version of the model, we find that an acceleration in the rate of embodied technical change should not be responded by an immediate and strong adoption effort. Instead, adoption labor should decrease in the short run, and the optimal technological gap is shown to increase either in the short or in the long run. The state of the institutions and policies around the technology sector is key in the design of the optimal adoption timing.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2003-08.pdf
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2003-08.

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Length: 23 pages
Date of creation: Feb 2003
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2003-08

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Keywords: Embodiment; Technology adoption; Technological gap; Transition dynamics;

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References

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  1. Boyan Jovanovic, 1995. "Learning and Growth," NBER Working Papers 5383, National Bureau of Economic Research, Inc.
  2. Raouf BOUCEKKINE & Blanca MARTINEZ & Cagri SAGLAM, 2001. "Technology Adoption, Capital Maintenance and the Technological Gap," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. BOUCEKKINE, Raouf & DEL RIO, Fernando & LICANDRO, Omar, . "Embodied technological change, learning-by-doint and the productivity slowdown," CORE Discussion Papers RP -1629, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Niosi, Jorge & Hanel, Petr & Fiset, Liette, 1995. "Technology transfer to developing countries through engineering firms: The Canadian experience," World Development, Elsevier, vol. 23(10), pages 1815-1824, October.
  5. Jeremy Greenwood & Boyan Jovanovic, 2001. "Accounting for Growth," NBER Chapters, in: New Developments in Productivity Analysis, pages 179-224 National Bureau of Economic Research, Inc.
  6. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 2005. "Obsolescence and modernization in the growth process," Journal of Development Economics, Elsevier, vol. 77(1), pages 153-171, June.
  7. Grether, Jean-Marie, 1999. "Determinants of Technological Diffusion in Mexican Manufacturing: A Plant-Level Analysis," World Development, Elsevier, vol. 27(7), pages 1287-1298, July.
  8. Gordon, Robert J, 2000. "Does the 'New Economy' Measure up to the Great Inventions of the Past?," CEPR Discussion Papers 2607, C.E.P.R. Discussion Papers.
  9. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-62, June.
  10. Krusell, Per, 1998. " Investment-Specific R&D and the Decline in the Relative Price of Capital," Journal of Economic Growth, Springer, vol. 3(2), pages 131-41, June.
  11. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
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Citations

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Cited by:
  1. Raouf Boucekkine & Benteng Zou, 2010. "Catching-up with the "locomotive": a simple theory," Working Papers 2010_07, Business School - Economics, University of Glasgow.
  2. Helene, LATZER, 2006. "Foreign Direct Investment and the Nature of the Imitation Process," Discussion Papers (ECON - Département des Sciences Economiques) 2006012, Université catholique de Louvain, Département des Sciences Economiques.
  3. Dawid, Herbert & Greiner, Alfred & Zou, Benteng, 2010. "Optimal foreign investment dynamics in the presence of technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 34(3), pages 296-313, March.
  4. Latzer, Hélène, 2013. "Bridging the technology gap with limited human capital resources," Economic Modelling, Elsevier, vol. 35(C), pages 175-184.
  5. Carmen, CAMACHO & Benteng, ZOU, 2003. "The Spatial Solow Model," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  6. repec:ebl:ecbull:v:18:y:2004:i:2:p:1-11 is not listed on IDEAS

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