<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This paper develops a static model of endogenous task-based technical progress to study how factor scarcity induces technological progress and changes in factor prices. The equilibrium technology is multi-dimensional and not strongly factor-saving in the sense of Acemoglu (2010). Nevertheless, labour scarcity induces labour productivity growth. There is a weak but no strong absolute equilibrium bias. This model provides a plausible interpretation of the famous contention of Hicks (1932) about the role of factor prices and factor endowments for induced innovations. It may serve as a microfoundation for canonical macro-economic models. Moreover, it accommodates features like endogenous factor supplies and a binding minimum wage.</p></abstract>

This paper develops a static model of endogenous task-based technical progress to study how factor scarcity induces technological progress and changes in factor prices. The equilibrium technology is multi-dimensional and not strongly factor-saving in the sense of Acemoglu (2010). Nevertheless, labour scarcity induces labour productivity growth. There is a weak but no strong absolute equilibrium bias. This model provides a plausible interpretation of the famous contention of Hicks (1932) about the role of factor prices and factor endowments for induced innovations. It may serve as a microfoundation for canonical macro-economic models. Moreover, it accommodates features like endogenous factor supplies and a binding minimum wage.

Endogenous task-based technical change—factor scarcity and factor prices

Economics and Business Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Endogenous task-based technical change\u2014factor scarcity and factor prices"}

This paper develops a static model of endogenous task-based technical progress to study how factor scarcity induces technological progress and changes in...

Endogenous task-based technical change—factor scarcity and factor prices

Pubblicato online: 04 lug 2020

Pagine: 81 - 118

Ricevuto: 29 feb 2020

Accettato: 08 giu 2020

DOI: https://doi.org/10.18559/ebr.2020.2.6

Parole chiave
economic growth, endogenous technical change, direction of technical change, biased technology

© 2020 Andreas Irmen, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Endogenous task-based technical change—factor scarcity and factor prices

Pubblicato online: 04 lug 2020

Pagine: 81 - 118

Ricevuto: 29 feb 2020

Accettato: 08 giu 2020

DOI: https://doi.org/10.18559/ebr.2020.2.6

Parole chiaveeconomic growth, endogenous technical change, direction of technical change, biased technology

© 2020 Andreas Irmen, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Parole chiave
economic growth, endogenous technical change, direction of technical change, biased technology