Labor- and Capital- Augmenting Technical Change
I analyze an economy in which profit-maximizing firms can undertake both labor- or capital-augmenting technological improvements. In the long run, the economy looks like the standard growth model with purely labor-augmenting technical change, and the share of labor in GDP is constant. Along the transition path, however, there is capital-augmenting technical change and factor shares change. A range of policies may have counterintuitive implications due to their effect on the direction of technical change. For example, taxes on capital income reduce the labor share in the short run, but increase it in the medium/long run.
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| Length: | |
| Date of creation: | Feb 2000 |
| Date of revision: | |
| Publication status: | published as Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, 03. |
| Handle: | RePEc:nbr:nberwo:7544 |
| Note: | EFG |
| Contact details of provider: | Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Web page: http://www.nber.org Email: More information through EDIRC
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References listed on IDEAS
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