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Technological Progress and Sectoral Shares
Author(s) -
Atallah Gamal,
Semenov Aggey
Publication year - 2018
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.12112
Subject(s) - economics , monopoly , oligopoly , relative price , productivity , technological change , competition (biology) , price elasticity of demand , technical change , microeconomics , industrial organization , macroeconomics , cournot competition , ecology , biology
This paper studies the effect of differences in the rate of technological progress between sectors on their relative sizes. There are two sectors: a stagnant sector, where productivity does not change over time, and a progressive sector, where costs decrease over time. We consider a conjectural variation approach which encompasses perfect competition, oligopoly and monopoly. The evolution of the relative shares of the stagnant and progressive sectors over time depends on the type of competition, cost levels and the price elasticity of demand. The relationship with the cost disease literature is discussed.