Premium
Technical Progress, Price Adjustments, and Wages
Author(s) -
Jones Ronald W.
Publication year - 2000
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00237
Subject(s) - economics , differential (mechanical device) , commodity , wage , elasticity of substitution , technical progress , factor price , technological change , technical change , ask price , elasticity (physics) , microeconomics , macroeconomics , labour economics , production (economics) , market economy , economy , engineering , productivity , aerospace engineering , materials science , composite material
Technical progress that takes place in one country is often soon transmitted to major trading partners, leading to adjustments in equilibrium commodity prices. This paper makes use of the twin concepts of differential industry effects and differential factor effects to ask about the role of each in determining how progress affects real wages. A simple diagram is utilized to illustrate in general settings the importance of factor bias in technology and the elasticity of substitution in demand in the analysis of real wage changes.