We present a steady state analysis of a labor-constrained classical growth model with endogenous direction and intensity of technical change. Firms use retained profits to raise their productive capacity and to improve labor and capital productivities. Investments are planned to maximize instantaneous profits. Comparative dynamics exercises show that (1) an increase in the saving rate and in R&D subsidies raises the steady state labor share, labor productivity growth and the employment rate, and (2) a rise in workers’ bargaining power reduces the employment rate while leaving productivity growth and distribution unaffected.

Induced innovation, endogenous technical change and income distribution in a labor-constrained model of classical growth / Zamparelli, Luca. - In: METROECONOMICA. - ISSN 0026-1386. - STAMPA. - 66:2(2015), pp. 243-262. [10.1111/meca.12068]

Induced innovation, endogenous technical change and income distribution in a labor-constrained model of classical growth

Zamparelli, Luca
2015

Abstract

We present a steady state analysis of a labor-constrained classical growth model with endogenous direction and intensity of technical change. Firms use retained profits to raise their productive capacity and to improve labor and capital productivities. Investments are planned to maximize instantaneous profits. Comparative dynamics exercises show that (1) an increase in the saving rate and in R&D subsidies raises the steady state labor share, labor productivity growth and the employment rate, and (2) a rise in workers’ bargaining power reduces the employment rate while leaving productivity growth and distribution unaffected.
2015
induced innovation; income distribution; classical growth
01 Pubblicazione su rivista::01a Articolo in rivista
Induced innovation, endogenous technical change and income distribution in a labor-constrained model of classical growth / Zamparelli, Luca. - In: METROECONOMICA. - ISSN 0026-1386. - STAMPA. - 66:2(2015), pp. 243-262. [10.1111/meca.12068]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1090094
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