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Choice of Techniques in Non‐proportionally Growing Economies: a Note on Pasinetti's Analysis
Author(s) -
Oda Sobei H.
Publication year - 1997
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/1467-999x.00028
Subject(s) - economics , set (abstract data type) , profit (economics) , consumption (sociology) , microeconomics , economy , computer science , social science , sociology , programming language
This paper discusses which technology is efficient for non‐ proportionally growing economies. Pasinetti (1988) claims that if each vertically hyper‐integrated sector uses such a set of techniques that the economy chooses if the profit rate equals the growth rate of the sector, the chosen set of techniques is the most efficient for the non‐proportionally growing consumption demand. This paper demonstrates that there may exist a more efficient choice of techniques than Pasinetti mentions. This result also implies that if more efficient techniques are invented, economies may have to change techniques gradually rather than immediately.