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Savings, expectations and technological unemployment: a generalization of assumptions for the Hicksian fixwage traverse

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  • Kraus, Margit
  • Wirth, Steffen

Abstract

This paper examines the role of alternative assumptions on savings and expectations for the fixwage traverse with strong forward biased technological change. After briefly outlining the model, some peculiarities of the adjustment path under the Hicksian Q-Assumption are investigated. Subsequently, the consequences of several savings functions consistent with the assumption of static expectations are explored. With all but one of these assumptions the possibility of permanent technological unemployment emerges. Additionally, the assumption of adaptive expectations is introduced, in which case technological unemployment throughout the early phase prevails. Furthermore, oscillating growth rates emerge, indicating the possibility of technologically caused business cycles.

Suggested Citation

  • Kraus, Margit & Wirth, Steffen, 2000. "Savings, expectations and technological unemployment: a generalization of assumptions for the Hicksian fixwage traverse," ZEW Discussion Papers 00-29, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5312
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    References listed on IDEAS

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    1. Malinvaud, E, 1986. "Reflecting on the Theory of Capital and Growth," Oxford Economic Papers, Oxford University Press, vol. 38(3), pages 367-385, November.
    2. Zamagni, Stefano, 1984. "Ricardo and Hayek Effects in a Fixwage Model of Traverse," Oxford Economic Papers, Oxford University Press, vol. 36(0), pages 135-151, Supplemen.
    3. Malte Faber, 1975. "Mehrergiebigkeit Und Hicks' Neuer Begriff Des Technischen Wandels," Kyklos, Wiley Blackwell, vol. 28(3), pages 574-596, August.
    4. Nardini, Franco, 1990. "Cycle-trend dynamics in a fixwage neo-Austrian model of traverse," Structural Change and Economic Dynamics, Elsevier, vol. 1(1), pages 165-194, June.
    5. Faber, Malte, 1975. "Mehrergiebigkeit und Hicks' neuer Begriff des technischen Wandels. (Superiority and Hicks' New Concept of Technical Change. With English summary.)," Kyklos, Wiley Blackwell, vol. 28(3), pages 574-596.
    6. Nardini, Franco, 1993. "Traverse and convergence in the neo-Austrian model: The case of a distributive shock," Structural Change and Economic Dynamics, Elsevier, vol. 4(1), pages 105-125, June.
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    More about this item

    Keywords

    Traverse analysis; technological unemployment; Neo-Austrian theory;
    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
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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