Technological Progress and Optimum Labor Market Friction

Debojyoti Mazumder

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents a stylized economy with a labor market characterized by search friction. Endogenous technological progress is the only source of growth. A single good is produced with the only factor of production, labor. It works as input in both production and R&D. The model derives the optimal job match that leads towards maximum long run gain, and this optimal can be achieved even without changing the economy’s growth rate. Model proposes, higher payment in R&D is optimal for high growing countries and/or countries with high labor market efficiency. The results are robust with tax-financing government expenditure and under stochastic fluctuations.

Keywords: Search and Matching friction; Labor Market; Technological progress (search for similar items in EconPapers)
JEL-codes: J24 J41 O41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92699

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