Embodying Embodiment in a Structural, Macroeconomic Input-Output Model

Daniel Wilson

Economic Systems Research, 2003, vol. 15, issue 3, 371-398

Abstract: In this paper, I develop a regression-based system of labour productivity equations that account for capital-embodied technological change and I incorporate this system into IDLIFT, a structural, macroeconomic input-output model of the US economy. Builders of regression-based forecasting models have long had difficulty finding labour productivity equations that exhibit the "Solowian' property that movements in investment should cause accompanying movements in labour productivity. The production theory developed by Solow and others dictates that this causation is driven by the effect of traditional capital deepening as well as technological change embodied in capital. Lack of measurement of the latter has hampered the ability of researchers to estimate properly the productivity-investment relationship. Recent research by Wilson (2001) has alleviated this difficulty by estimating industry-level embodied technological change. In this paper, I utilize those estimates to construct capital stocks adjusted for technological change and then use these adjusted stocks to estimate Solow-type labour productivity equations. It is shown that replacing IDLIFT's former productivity equations, based on changes in output and time trends, with the new equations, results in a convergence between the dynamic behaviour of the model and that predicted by traditional (Solowian) production theory.

Keywords: Equipment-embodied Technological Change; Productivity; Forecasting (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/0953531032000111817 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Embodying embodiment in a structural, macroeconomic input-output model (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ecsysr:v:15:y:2003:i:3:p:371-398

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CESR20

DOI: 10.1080/0953531032000111817

Access Statistics for this article

Economic Systems Research is currently edited by Bart Los and Manfred Lenzen

More articles in Economic Systems Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().