Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor's Technical Progress Function

33 Pages Posted: 6 Jan 2016

See all articles by Ekkehart Schlicht

Ekkehart Schlicht

University of Munich - Department of Economics; IZA Institute of Labor Economics

Date Written: February 2016

Abstract

This note proposes a growth model that is derived from the standard Solow growth model by replacing the neoclassical production function with Kaldor's technical progress function while maintaining a marginalist theory of factor prices in the spirit suggested by von Weizs├Ącker. The hybrid model so obtained explains balanced growth in a way that appears less arbitrary than possible explanations in the Solow model, especially because it directly accounts for Harrod neutral technical change, without any need for further assumptions. It complements the current neoclassical and AK models by offering a further perspective for interpreting economic growth.

Suggested Citation

Schlicht, Ekkehart, Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor's Technical Progress Function (February 2016). Metroeconomica, Vol. 67, Issue 1, pp. 119-151, 2016. Available at SSRN: https://ssrn.com/abstract=2711528 or http://dx.doi.org/10.1111/meca.12101

Ekkehart Schlicht (Contact Author)

University of Munich - Department of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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