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Volume 6 (20) Number 2 pp. 81-118

Andreas Irmen

Department of Economics and Management, University of Luxembourg.

Endogenous task-based technical change—factor scarcity and factor prices

Abstract:

This paper develops a static model of endogenous task-based technical progress
to study how factor scarcity induces technological progress and changes in factor
prices. The equilibrium technology is multi-dimensional and not strongly factorsaving
in the sense of Acemoglu (2010). Nevertheless, labour scarcity induces labour
productivity growth. There is a weak but no strong absolute equilibrium bias. This
model provides a plausible interpretation of the famous contention of Hicks (1932)
about the role of factor prices and factor endowments for induced innovations. It may
serve as a microfoundation for canonical macro-economic models. Moreover, it accommodates
features like endogenous factor supplies and a binding minimum wage.

pub/2020_2_81.pdf Full text available in Adobe Acrobat format:
http://www.ebr.edu.pl/volume20/issue2/2020_2_81.pdf
Keywords: economic growth, endogenous technical change, direction of technical change, biased technology.

DOI: 10.18559/ebr.2020.2.6

For citation:

MLA Irmen, Andreas. "Endogenous task-based technical change—factor scarcity and factor prices." Economics and Business Review EBR 20.2 (2020): 81-118. DOI: 10.18559/ebr.2020.2.6
APA Irmen, A. (2020). Endogenous task-based technical change—factor scarcity and factor prices. Economics and Business Review EBR 20(2), 81-118 DOI: 10.18559/ebr.2020.2.6
ISO 690 IRMEN, Andreas. Endogenous task-based technical change—factor scarcity and factor prices. Economics and Business Review EBR, 2020, 20.2: 81-118. DOI: 10.18559/ebr.2020.2.6