Premium
Induced Innovation Revisited
Author(s) -
Funk Peter
Publication year - 2002
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00275
Subject(s) - economics , technical progress , foundation (evidence) , technical change , moment (physics) , factor (programming language) , neoclassical economics , macroeconomics , computer science , productivity , political science , physics , classical mechanics , law , programming language
This paper studies the joint evolution of factor prices, factor shares and the type of technical progress. Its main aim is to give a microeconomic foundation to the Hypothesis of Induced Innovation of the earlier literature, which assumes that the type of progress at any moment of time is chosen so as to maximize the current rate of output growth. An important conclusion of the Hypothesis of Induced Innovation is that in the long run factor–augmenting technical progress takes the form of pure labour augmentation.