economic growth; endogenous technical change; direction of technical change; biased technology
Abstract :
[en] 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, labor scarcity induces labor 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 micro-foundation for canonical macro-economic models. Moreover, it
accommodates features like endogenous factor supplies and a binding minimum wage.
Disciplines :
Macroeconomics & monetary economics
Author, co-author :
Irmen, Andreas ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM)
