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Economic Growth with Mechanization of the Production Process


  • Nakamura, Hideki
  • Nakamura, Masakatsu


This paper considers endogenous technological changes of inputs from labor to capital in operations of a production process, i.e., a kind of mechanization of the production process. While retaining the property of decreasing returns in capital, we can show that because of complementary relationships between the accumulation of capital and the mechanization of the production process, long-run growth is possible through the accumulation of capital only. It involves no growth of total factor productivity. Furthermore, our model can partly present a micro-foundation of constant-elasticity-of-substitution production function. Investigating our model empirically, we confirm both technological progress and our technological change.

Suggested Citation

  • Nakamura, Hideki & Nakamura, Masakatsu, 2005. "Economic Growth with Mechanization of the Production Process," Discussion Paper 252, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:piedp1:252

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    References listed on IDEAS

    1. Vladimir Bezdek & Kamil Dybczak & Ales Krejdl, 2003. "Czech Fiscal Policy: Introductory Analysis," Working Papers 2003/07, Czech National Bank, Research Department.
    2. Kotlikoff, Laurence, 1996. "Privatizing School Security at Home and Abroad," American Economic Review, American Economic Association, vol. 86(2), pages 368-372, May.
    3. Alfredo Cuevas & George A Mackenzie & Philip R. Gerson, 1997. "Pension Regimes and Saving," IMF Occasional Papers 153, International Monetary Fund.
    4. Deborah Roseveare & Willi Leibfritz & Douglas Fore & Eckhard Wurzel, 1996. "Ageing Populations, Pension Systems and Government Budgets: Simulations for 20 OECD Countries," OECD Economics Department Working Papers 168, OECD Publishing.
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    More about this item


    Capital Accumulation; Mechanization of a Production Process; Total Factor Productivity; Envelope; Elasticity of Substitution;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General


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