Labor- and Capital- Augmenting Technical Change

Daron Acemoglu

No 7544, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I analyze an economy in which profit-maximizing firms can undertake both labor- or capital-augmenting technological improvements. In the long run, the economy looks like the standard growth model with purely labor-augmenting technical change, and the share of labor in GDP is constant. Along the transition path, however, there is capital-augmenting technical change and factor shares change. A range of policies may have counterintuitive implications due to their effect on the direction of technical change. For example, taxes on capital income reduce the labor share in the short run, but increase it in the medium/long run.

JEL-codes: O14 O33 (search for similar items in EconPapers)
Date: 2000-02
New Economics Papers: this item is included in nep-dev, nep-dge, nep-ino, nep-lab and nep-pub
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, 03.

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