IDEAS home Printed from https://ideas.repec.org/p/mnh/vpaper/1004.html
   My bibliography  Save this paper

Capital Accumulation, Factor Prices and Endogenous Labor-Saving Technical Change

Author

Listed:
  • Irmen, Andreas

Abstract

The process of capital accumulation understood as a rise in the capitallabor ratio steadily raises the scarcity of labor with respect to capital. This movement in relative factor prices may act as an incentive for profit-maximizing firms to direct innovations towards labor saving technologies. We make this point in a model of endogenous technical change that relates the neoclassical growth paradigm to the concept of induced innovation. These ingredients suggest an economic development of economies characterized by an endogenous "run through stages". In early stages, the driving force of economic growth is capital accumulation because the return of physical capital is high and labor is cheap. In mature stages, however, labor is expensive so that firms invest in new technologies that economize on labor. Thus economies may evolve from a regime of pure capital accumulation into one with capital accumulation and endogenous technical change.

Suggested Citation

  • Irmen, Andreas, 2002. "Capital Accumulation, Factor Prices and Endogenous Labor-Saving Technical Change," Discussion Papers 607, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  • Handle: RePEc:mnh:vpaper:1004
    as

    Download full text from publisher

    File URL: https://ub-madoc.bib.uni-mannheim.de/1004/1/607.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    2. Grilo, Isabel & Shy, Oz & Thisse, Jacques-Francois, 2001. "Price competition when consumer behavior is characterized by conformity or vanity," Journal of Public Economics, Elsevier, vol. 80(3), pages 385-408, June.
    3. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnh:vpaper:1004. 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: (Katharina Rautenberg). General contact details of provider: http://edirc.repec.org/data/ivmande.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.