A comparative study of energy saving technical progress in a vintage capital model

We analyze the hypothesis about the effectiveness of energy saving technologies to reduce the trade-off between economic growth and energy preservation. In a general equilibrium vintage capital model with embodied energy saving technical progress, we show that positive growth is only possible if the growth rate of the energy saving technical progress exceeds the decreasing rate of the energy supply.     

Economic development,human capital and technical change: the question of machinery revisited

A systemic element of prevailing economic growth and development is the massive introduction of machinery into the production process. The introduction of new technologies became decidedly a debated issue in economic analysis because of the dual character of technology, which simultaneously creates and destroys employment, advances and deteriorates labor skills. This paper attempts to introduce the relative issues and to assess the extent to which the introduction of machinery into the labor process improves human capital or simplifies labor skills and forms a stream of unskillful laborers.

Adjusted net saving and welfare change

The World Bank has estimated Adjusted net (or genuine) saving (ANS) as a macro level index of sustainable development. ANS extends the conventional net saving by adding human capital accumulation and deducting natural resources losses. This paper tests ANSas an index of sustainable development. It examines whether ANS explains changes in welfare. Welfare is measured by Infant mortality rate (IMR) and Human Development Index (HDI). The study was conducted in 36 selected developing and developed countries and covers the period 1971-2000. The results suggest a positive and significant relationship between Adjusted net saving and aggregate welfare but weak in magnitude.     

Structural change under New Labour

The paper examines specific features of structural change inthe UK since 1997, contrasting the decline in industrial jobswith the rise in a variety of service jobs. It examines theproximate causes of structural change, in particular whetherthe chronically slow growth of manufacturing output in the 1980shas persisted. The implications of this structural change areconsidered, particularly the effects on the balance of paymentsand regional employment patterns. The paper suggests that themain impact of government policies on regional employment mayhave been through the direct and multiplier effects of publicexpenditure.     

Product variety and technical change

Motivated by growth models based on the variety of capital goods, recent empirical studies have established links between productivity and several trade-based measures of product variety, carrying the implication that these measures may represent technology. We study this implication by explicitly proposing the variety of capital goods available for production as a direct measure of the state of technology. Within a simple growth and development framework, we derive a ‘conditional technological convergence’ hypothesis on how this variety should behave if it were indeed to represent the state of technology. The hypothesis is tested with highly disaggregated trade data, using tools from the income convergence literature. The results suggest that a trade-based count measure of the variety of available capital goods, allowing for product differentiation by country of origin, indeed behaves ‘as if’ it represented technology when change of technology is understood as a learning process, and that there is conditional technological convergence among our panel of mainly OECD and transition economies.     

Enhancing the user role in the development of technical standards for telecommunications

The paper examines the actual and potential roles of business users of telecommunications services in influencing the development of technical standards. Variours institutional structures in the user community are examined as they relate to user particioation in formally constituted standards development arganizations. Discreparcies between users and suppliers in participatory motivations, strategies and resources are noted. The standardization process in telecommunications emerges as a technology-push initiative led by the suplly industries. However, structural changes in the telecommunications industries have resulted in new approaches to standards making. As a result, standards have acquired a new significane in terms of user control user technical and service evolution. Using the development of European standards for digital wireless telephony as an example, it is argued that this new standardization environment mandates a much more active role for users. However, it is also argued that the user stake in telecommunications standards is not of an equivalent nature to the supplier stake. Thus, a theortical framework is presented which that effective user involvement will require the development of a parallel institutional structure for the user community.     

Tradable and nontradable directed technical change

ABSTRACT

We wish to reconcile the major trends in wages and the terms of trade using a directed technical change approach in which: (i) tradable and nontradable goods can be substitutes or complements; and (ii) scale effects can be present or can be partially or totally removed. With a lower skilled labour ratio and a higher relative wage in the tradable sector, the price (real exchange rate or terms of trade) mechanism is crucial in determining sectoral productivity differences and thus wage inequality. Along the balanced growth path, the real exchange rate can be negatively related with the relative productivities in horizontal innovation (the Balassa-Samuelson effect) and with the relative labour level, depending on scale effects. The wage premium increases due to an increase in the relative labour level in the nontradable sector under substitutability with scale effects or under complementarity without scale effects. A calibrated version of the model indicates that the model closely replicates the data for Germany. Moreover, while the Balassa-Samuelson effect is quantified, an increase in the relative supply of labour in the tradable sector decreases both terms of trade and inequality.     

Directed technical change and environmental quality

Portuguese Economic Journal - We propose a directed technical change model with two sectors, clean and dirty, to analyze the impact of the degree of substitutability between sectors and the degree...     

Endogenous sector-biased technical change and perpetual and transient structural change

This paper provides a new definition of structural change and then categorizes such changes into two types. Transient structural change is related to the short-term adjustment of sectoral labor employment, while perpetual structural change concerns the long-run trends of labor reallocation among sectors. If we focus on supply-side reasons, we find that the one and only fundamental driving force of perpetual structural change is sector-biased technical change. We also investigate the structural parameters of the model that determine the direction of sector-biased technical change.     

Demographic change, human capital and welfare

Projected demographic changes in the U.S. will reduce the share of the working-age population. Analyses based on standard OLG models predict that these changes will increase the capital-labor ratio. Hence, rates of return to capital decrease and wages increase, which has adverse welfare consequences for current cohorts who will be retired when the rate of return is low. This paper argues that adding endogenous human capital accumulation to the standard model dampens these forces. We find that this adjustment channel is quantitatively important. The standard model with exogenous human capital predicts welfare losses up to 12.5% (5.6%) of lifetime consumption, when contribution (replacement) rates to the pension system are kept constant. These numbers reduce to approximately 8.7% (4.4%) when human capital can endogenously adjust.     

The network of networks: Localized technological change in telecommunications and productivity growth

Radical innovations in the usage of telecommunication services have drastically changed the role of telecommunications in the economy. Today the usage of telecommunications services is associated with the opportunity to extract significant quasi-rents. An empirical analysis of the Italian case in the mid-eighties confirms the significant difference between telecommunications cost share and marginal productivity levels. The opportunity to reap transient quasi-rents has in turn pushed users to innovate so as to become major players in the arena of technological change in telecommunications and information technologies. In this context the notion of network of networks, implemented in the European Union, seems most appropriate to push the dynamic efficiency of the system and accommodate both centrifugal and centripetal innovations, yet also to retain network interoperability and interconnectivity.     

Niches in evolutionary theories of technical change

In this article, the use of the niche concept for explaining radical technical change is explored. Contributions of various strands of literatures are elaborated and systematized in a taxonomy. Radical change or technological discontinuity is defined as the establishment of a new sociotechnical regime. Sociotechnical regimes carry and store rules for how to produce, use and regulate specific technologies. They perform the task of genes and define the boundary between technological species. It is proposed that radical change is generated by four different evolutionary mechanisms and patterns: natural selection, punctuated equilibrium, market niche selection, and technological niche selection. In each pattern, a different type of niche is implicated in the change process. The difference between niches results from differentiating between two dimensions: (1) whether niches are internal or external to the prevailing sociotechnical regime; (2) whether rules for design and use of a specific technology are stable or unstable within the niche.

Detrimental externalities,nonconvexities and technical change

This paper reexamines the implications of detrimental externalities for the nonconvexity of the social production set. A simple model, allowing for induced technical change, is developed to illustrate that the imposition of effluent changes can induce technological changes which serve to ameliorate these nonconvexities.     

Productivity and technical change: Measurement and testing

This paper considers two specifications, namely, the time trend (TT) and general index (GI) of technical change. These models are extended to accommodate the TFP growth accounting relationship in to the econometric model. We also propose a formal test to determine whether the TT or the GI model is appropriate for the data. I would like to thank Badi Baltagi for his comments and Peter Schmidt for suggesting the test proposed in the paper. None, other than me, is responsible for any remaining errors.     

Estimating technical change by nonparametric methods

A nonparametric method using dynamic data envelopment analysis is developed here to specify and estimate a dynamic production frontier. By this technique technological progress measured by the time shift of the production frontier and the scale economies measured by increasing returns to scale are estimated from the observed input output data, which may sometimes be nonstationary. An application to US computer industry exhibits substantial technological progress and scale economies over the period 1987–1998.     

The process of technical change in UK manufacturing

This paper tests the validity of the Fisher hypothesis, which establishes a positive relation between interest rates and expected inflation, for the G7 countries and 45 developing economies. For this purpose, we estimate a version of the GARCH specification of the hypothesis for all countries included in the sample. We also test the augmented Fisher relation by including the inflation uncertainty in the equation. The simple Fisher relation holds in all G7 countries but in only 23 developing countries. There is a positive and statistically significant relationship between interest rates and inflation uncertainty for six of the G7 and 18 of the developing countries and this relationship is negative for seven developing countries.     

A model of embodied technical change and employment

A “vintage” framework is described for studying the effects of technical change on economic development, particular attention being given to the level of employment. The framework is based on the notion that investment in new techniques is a major mechanism through which improvements in productivity are obtained. With the specification of demand and investment functions, a simple dynamic model is developed by means of which the effects of both continuous and discontinuous technical changes can be investigated, under various assumptions regarding the response of other economic variables to such changes. It is shown that a variety of behavioral characteristics are produced when technical change does not occur smoothly; in particular, it is suggested that variations in rates of technical change may act as a determinant of fluctuations in other economic variables.