Technology Adoption, Capital Maintenance and the Technological Gap

Raouf Boucekkine (), Blanca Martinez () and Çağrı Sağlam

No 2001033, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, we study the properties of optimal growth models à la Nelson and Phelps (1966) where the labor resources of an economy can be allocated freely either to production, technology adoption or capital maintenance. We first characterize the balanced growth paths of a benchmark model without maintenance services. Then we introduce te maintenance activity via the depreciation rate of capital. We characterize the optimal allocation of labor across the three activities. We prove that when technolgical shocks occur, equilibrium maintenance and adoption operate in opposite directions. The main prediction of the model is that though capital maintenance deepens the technological gap by diverting labor resources from adoption, it generally increases the long run output level at equilibrium

Keywords: Technology adoption; Capital maintenance; Technological gap; Long run output level (search for similar items in EconPapers)
JEL-codes: E22 E32 O40 (search for similar items in EconPapers)
Pages: 25
Date: 2001-11-01
New Economics Papers: this item is included in nep-dev and nep-ino
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: TECHNOLOGY ADOPTION, CAPITAL MAINTENANCE AND THE TECHNOLOGICAL GAP (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2001033

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