Savings, Expectations and Technological Unemployment a Generalization of Assumptions for the Hicksian Fixwage Traverse

23 Pages Posted: 29 May 2003

See all articles by Margit Kraus

Margit Kraus

ZEW – Leibniz Centre for European Economic Research

Steffen Wirth

University of Hohenheim - Faculty of Business, Economics and Social Sciences

Date Written: 2000

Abstract

This paper examines the role of alternative assumptions on savings and expectations for the fixwage traverse with strong forward biased technological change. After briefly outlining the model, some peculiarities of the adjustment path under the Hicksian Q-Assumption are investigated. Subsequently, the consequences of several savings functions consistent with the assumption of static expectations are explored. With all but one of these assumptions the possibility of permanent technological unemployment emerges. Additionally, the assumption of adaptive expectations is introduced, in which case technological unemployment throughout the early phase prevails. Furthermore, oscillating growth rates emerge, indicating the possibility of technologically caused business cycles.

Keywords: Traverse analysis, technological unemployment, Neo- Austrian theory

JEL Classification: O31, O33

Suggested Citation

Kraus, Margit and Wirth, Steffen, Savings, Expectations and Technological Unemployment a Generalization of Assumptions for the Hicksian Fixwage Traverse (2000). ZEW Discussion Paper No. 00-29, Available at SSRN: https://ssrn.com/abstract=378760 or http://dx.doi.org/10.2139/ssrn.378760

Margit Kraus (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
+49 621 1235 163 (Phone)
+49 621 1235 215 (Fax)

Steffen Wirth

University of Hohenheim - Faculty of Business, Economics and Social Sciences ( email )

70593 Stuttgart
Germany
+49 711 459 2932 (Phone)
+49 711 459 3804 (Fax)

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