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

Andreas Irmen

Economics and Business Review, 2020, vol. 6, issue 2, 81-118

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.

Keywords: economic growth; endogenous technical change; direction of technical change; biased technology (search for similar items in EconPapers)
JEL-codes: D92 O31 O33 O41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Endogenous Task-Based Technical Change - Factor Scarcity and Factor Prices - (2020)
Working Paper: Endogenous Task-Based Technical Change - Factor Scarcity and Factor Prices (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:6:y:2020:i:2:p:81-118:n:6

DOI: 10.18559/ebr.2020.2.6

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