Tasks, technology, and factor prices in the neoclassical production sector

Andreas Irmen

Journal of Economics, 2020, vol. 131, issue 2, No 1, 121 pages

Abstract: Abstract This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies. We show that the effect of factor-augmenting technical change on relative and absolute factor prices can be decomposed into a productivity effect and a task-demand effect of opposite sign. These effects appear since the novel task-based approach distinguishes between the demands for tasks and the demands for factors. This perspective provides a new intuition for the emergence of relative and absolute factor biases and the role of the elasticity of substitution.

Keywords: Technical change; Factor prices; Factor-specific tasks; Neoclassical production (search for similar items in EconPapers)
JEL-codes: O33 O41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Tasks, Technology, and Factor Prices in the Neoclassical Production Sector (2020)
Working Paper: Tasks, Technology, and Factor Prices in the Neoclassical Production Sector (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:131:y:2020:i:2:d:10.1007_s00712-020-00705-9

DOI: 10.1007/s00712-020-00705-9

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