Logo
Munich Personal RePEc Archive

Cost-share induced technological change and Kaldor’s stylized facts

Kemp-Benedict, Eric (2018): Cost-share induced technological change and Kaldor’s stylized facts. Forthcoming in: Metroeconomica

This is the latest version of this item.

[thumbnail of MPRA_paper_86607.pdf]
Preview
PDF
MPRA_paper_86607.pdf

Download (991kB) | Preview

Abstract

This paper presents a theory of induced technological change in which firms pursue a random, local, and bounded search for productivity-enhancing innovations. Firms implement profitable innovations at fixed prices, which then spread through the economy. After diffusion, all firms adjust prices and wages. The model is consistent with a variety of price-setting behaviors, which determine equilibrium positions characterized by constant cost shares and productivity growth rates. Target-return pricing yields Harrod-neutral technological change with a fixed wage share as a stable equilibrium, consistent with Kaldor’s stylized facts, while allowing for deviations from equilibrium, as observed in the longer historical record.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.