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Investment And Technical Progress In The G7 Countries And Australia

Author

Listed:
  • John Pawley

    (UWA Business School, The University of Western Australia)

  • Ernst Juerg Weber

    (UWA Business School, The University of Western Australia)

Abstract

The vintage model of capital accumulation predicts that technical progress depends on the installation of new capital equipment. In this paper it is found that investment raises labor productivity in the G7 countries and Australia. This finding implies that the decline in investment during the global financial crisis will have a long lasting detrimental effect on labor productivity and hence wages.

Suggested Citation

  • John Pawley & Ernst Juerg Weber, 2011. "Investment And Technical Progress In The G7 Countries And Australia," Economics Discussion / Working Papers 11-10, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:11-10
    as

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    File URL: https://www.business.uwa.edu.au/__data/assets/pdf_file/0011/1627508/11--10-Investment-and-Technical-Progress-in-the-G7-Countries-and-Australia.pdf
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    References listed on IDEAS

    as
    1. Mills,Terence C. & Markellos,Raphael N., 2008. "The Econometric Modelling of Financial Time Series," Cambridge Books, Cambridge University Press, number 9780521710091.
    2. Cooley, Thomas F. & Greenwood, Jeremy & Yorukoglu, Mehmet, 1997. "The replacement problem," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 457-499, December.
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    4. N. Kaldor & J. A. Mirrlees, 1971. "A New Model of Economic Growth," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 13, pages 165-183, Palgrave Macmillan.
    5. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-980, September.
    6. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    7. Mills,Terence C. & Markellos,Raphael N., 2008. "The Econometric Modelling of Financial Time Series," Cambridge Books, Cambridge University Press, number 9780521883818.
    8. Ernst Juerg Weber, 2009. "Wilfred Edward Graham Salter: The Merits of a Classical Economic Education," Economics Discussion / Working Papers 09-14, The University of Western Australia, Department of Economics.
    9. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
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