The Importance of the Embodied Question Revisited

Raouf Boucekkine (), Fernando del Río and Omar Licandro ()

No 1999026, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In order to assess the importance of embodiment, we build up an endogenous growth model in which learning by doing is the engine of both embodied and disembodied technological progress. In sharp contrast to Phelps (1962), we show that a change in the composition of technical change affects the growth rate in the long run. We also provide an alternative explanation for the productivity slowdown: an increase in the fraction of embodied technical progress, through an improvement in the learning efficiency of the capital goods sector, permanently lowers the growth rate of technological progress, by increasing the obsolescence costs of investment. The productivity slowdown occurs together with a rise in the rate of decline of investment goods prices. Finally, we show that an increase in the embodied fraction of technical change reduces the gap between the optimal and the decentralized growth rates.

Keywords: Embodied technical progress; Obsolescence; Learning by doing; Productivity slowdown; Optimal growth (search for similar items in EconPapers)
JEL-codes: E22 E32 O40 (search for similar items in EconPapers)
Pages: 22
Date: 1999-08-01
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The importance of the embodied question revisited (2000)
Working Paper: The importance of the embodied question revisited
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1999026

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