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Hicks Neutral Technical Change Revisited: CES Production Function and Information of General Order

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  • Dupuy Arnaud

    () (Maastricht University)

Abstract

In this paper, I show that Hicks neutral technical change is identified as the information of order sigma obtained if the distribution of factor prices is replaced by the distribution of factor efficiency parameters. Together with Solow's residual, the information method enables us to distinguish between the neutral and non neutral part of technical and organizational changes. An empirical evaluation of both methods is provided using Jorgenson's (2001) US data for the period 1948-1999. The main results of the paper are that i) both neutral and non neutral technical change have occurred in the US in the period 1948-1999 and ii) 3/4th of the productivity slowdown observed in the 70s and 80s is due to a deceleration in the contribution of non neutral technical changes.

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  • Dupuy Arnaud, 2006. "Hicks Neutral Technical Change Revisited: CES Production Function and Information of General Order," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-26, August.
  • Handle: RePEc:bpj:bejmac:v:topics.6:y:2006:i:2:n:2
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    Cited by:

    1. Chen, Xi, 2017. "Biased Technical Change, Scale, And Factor Substitution In U.S. Manufacturing Industries," Macroeconomic Dynamics, Cambridge University Press, vol. 21(02), pages 488-514, March.
    2. Marijn Verschelde & Michel Dumont & Bruno Merlevede & Glenn Rayp, 2014. "A constrained nonparametric regression analysis of factor-biased technical change and TFP growth at the firm level," Working Paper Research 266, National Bank of Belgium.
    3. Nitin Gupta, 2012. "Impact of Elasticities of Substitution, Technical Change, and Labour Regulations on Labour Welfare in Indian Industries," ASARC Working Papers 2012-10, The Australian National University, Australia South Asia Research Centre.
    4. Su, Xuanming & Zhou, Weisheng & Nakagami, Ken'Ichi & Ren, Hongbo & Mu, Hailin, 2012. "Capital stock-labor-energy substitution and production efficiency study for China," Energy Economics, Elsevier, vol. 34(4), pages 1208-1213.

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