Direction and Intensity of Technical Change: a Micro Model
This paper develops a growth model combining elements of endogenous growth and induced innovation literatures. In a standard induced innovation model firms select at no cost innovations from an innovation possibilities frontier describing the trade-off between increasing capital or labor productivity. The model proposed allows firms to choose not only the direction but also the size of innovation by representing the innovation possibilities through a cost function of capital and labor augmenting innovations. By so doing, it provides a micro-foundation both of the intensity and of the direction of technical change. The policy analysis implies that an increase in subsidies to R&D as opposed to capital accumulation raises per capita steady state growth, employment rate and wage share.
|Date of creation:||Feb 2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://phdschool-economics.dse.uniroma1.it/website/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bester, Helmut & Petrakis, Emmanuel, 1998.
"Wages and Productivity Growth in a Competitive Industry,"
CEPR Discussion Papers
2031, C.E.P.R. Discussion Papers.
- Bester, Helmut & Petrakis, Emmanuel, 2003. "Wages and productivity growth in a competitive industry," Journal of Economic Theory, Elsevier, vol. 109(1), pages 52-69, March.
- Helmut Bester & Emmanuel Petrakis, . "Wages and Productivity Growth in a Competitive Industry," Papers 009, Departmental Working Papers.
- A. J. Julius, 2005. "Steady-State Growth And Distribution With An Endogenous Direction Of Technical Change," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 101-125, 02.
- Shah, Anup & Desai, Meghnad, 1981. "Growth Cycles with Induced Technical Change," Economic Journal, Royal Economic Society, vol. 91(364), pages 1006-10, December.
- Funk, Peter, 2002.
"Induced Innovation Revisited,"
London School of Economics and Political Science, vol. 69(273), pages 155-71, February.
- Irmen, Andreas, 2005.
"Extensive and intensive growth in a neoclassical framework,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 29(8), pages 1427-1448, August.
- Irmen, Andreas, 2004. "Extensive and Intensive Growth in a Neoclassical Framework," CEPR Discussion Papers 4266, C.E.P.R. Discussion Papers.
- Thomas Michl, 1999. "Biased Technical Change and the Aggregate Production Function," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(2), pages 193-206.
- Hellwig, Martin & Irmen, Andreas, 1999.
"Endogenous Technical Change in a Competitive Economy,"
Sonderforschungsbereich 504 Publications
99-53, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Hellwig, Martin & Irmen, Andreas, 2001. "Endogenous Technical Change in a Competitive Economy," Journal of Economic Theory, Elsevier, vol. 101(1), pages 1-39, November.
- Foley, Duncan K., 2003. "Endogenous technical change with externalities in a classical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 167-189, October.
- Daron Acemoglu, 2002.
"Directed Technical Change,"
Review of Economic Studies,
Oxford University Press, vol. 69(4), pages 781-809.
- Frank Thompson, 1995. "Technical Change, Accumulation and the Rate of Profit," Review of Radical Political Economics, Union for Radical Political Economics, vol. 27(1), pages 97-126, March.
- van der Ploeg, F., 1987. "Growth cycles, induced technical change, and perpetual conflict over the distribution of income," Journal of Macroeconomics, Elsevier, vol. 9(1), pages 1-12.
- Daron Acemoglu, 2000.
"Labor- and Capital- Augmenting Technical Change,"
NBER Working Papers
7544, National Bureau of Economic Research, Inc.
- Nelson H. Barbosa-Filho & Lance Taylor, 2006. "Distributive And Demand Cycles In The Us Economy-A Structuralist Goodwin Model," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 389-411, 07.
When requesting a correction, please mention this item's handle: RePEc:dsc:wpaper:4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sardoni)
If references are entirely missing, you can add them using this form.