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Technological Change and Demographics in a model where consumption is time-constrained

Manoj Pant () and Sugandha Huria ()
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Manoj Pant: Indian Institute of Foreign Trade,New Delhi,India

No 2259, Working Papers from Indian Institute of Foreign Trade

Abstract: This study demonstrates why traditional ‘cost-saving’ technical progress fails in an economy where consumption is time-constrained. In such a case, introducing ‘time- saving’ technical progress establishes a new consumption-production equilibrium characterized by higher per-capita consumption and real income, lower prices, and, a higher scale of production for surviving producers. Nonetheless, since there is a limit to how much time can be saved by technological advances, the model also suggests an alternative solution in the form of a rising labor force (via immigration) to close the production-consumption gap. This solution echoes the empirical reality illustrating why Emerging Market Economies matter.

Keywords: Cost-saving technical progress; Time-saving technical progress; Consumption-time; General Equilibrium model; Demographics; Immigration (search for similar items in EconPapers)
JEL-codes: D11 D21 D50 O14 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2022
New Economics Papers: this item is included in nep-gro
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