Pattern Analysis Applied to Structural Economic Dynamics with a Choice of Technique: A Numerical Example
26 Pages Posted: 2 Jan 2019
Date Written: December 17, 2018
This article illustrates the application of pattern analysis to structural economic dynamics with a choice of technique. A numerical example is presented in which technical progress is introduced. Examples of temporal paths through the parameter space illustrate variations of the wage frontier. A single technique is initially uniquely cost-minimizing for all feasible rates of profits. Eventually, the technique for which coefficients of production decrease at the fastest rate is always cost-minimizing. This example illustrates possible variations in the existence of Sraffa effects, which arise during the transition between these positions.
Keywords: choice of technique, structural dynamics, switch points, technological change
JEL Classification: B1, C67, D46, O33
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