Capital-Augmenting Technology
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A Capital-Augmenting Technology is an Economic Augmenting Technology that increases the ratio of capital's marginal product to labour's marginal product for a given capital to labour ratio.
- AKA: Capital-Based Technological Change.
- Context:
- It can increase Capital's Share of Income.
- …
- Example(s):
- Counter-Example(s):
- See: Technological Change, Capital Share of Income.
References
2013
- Template:Synch http://wikipedia.org/wiki/Technological_change#Economics
- Technological change is a term that is used in economics to describe a change in the set of feasible production possibilities.
Neutral technological change refers to the behaviour of technological change in models. A technological innovation is Hicks neutral, following John Hicks (1932), if a change in technology does not change the ratio of capital's marginal product to labour's marginal product for a given capital to labour ratio. A technological innovation is Harrod neutral (following Roy Harrod) if the technology is labour-augmenting (i.e. helps labor); it is Solow neutral if the technology is capital-augmenting (i.e. helps capital).[1]
- Technological change is a term that is used in economics to describe a change in the set of feasible production possibilities.
- ↑ J.R. Hicks (1932, 2nd ed., 1963). The Theory of Wages, Ch. VI, Appendix, and Section III. Macmillan.
- (Karabarbounis & Neiman, 2013) ⇒ Loukas Karabarbounis, and Brent Neiman. (2013). “The Global Decline of the Labor Share." National Bureau of Economic Research, 129(1). doi:10.1093/qje/qjt032
2003
- (Acemoglu, 2003) ⇒ Daron Acemoglu. (2003). “Labor‐and capital‐augmenting technical change.” In: Journal of the European Economic Association, 1(1).
- ABSTRACT: I analyze an economy in which firms can undertake both labor- and capital-augmenting technological improvements. In the long run, the economy resembles the standard growth model with purely labor-augmenting technical change, and the share of labor in GDP is constant. Along the transition path, however, there is capital-augmenting technical change and factor shares change. Tax policy and changes in labor supply or savings typically change factor shares in the short run, but have no or little effect on the long-run factor distribution of income. (JEL: O33, O14, O31, E25)