Technological Progress, Investment, and Full-Employment Growth

1963 ◽  
Vol 29 (3) ◽  
pp. 311 ◽  
Author(s):  
J. G. Cragg
Keyword(s):  
Technological Progress ◽  
Employment Growth ◽  
Full Employment

scholarly journals A Mathematical Model of MMT (Modern Monetary Theory) with Profit Return

2021 ◽  
Vol 11 (4) ◽  
pp. 39
Author(s):  
Yasuhito Tanaka
Keyword(s):  
Technological Progress ◽  
Budget Deficit ◽  
Full Employment ◽  
Returns To Scale ◽  
Perfect Competition ◽  
Budget Deficits ◽  
Price Inflation ◽  
The Difference ◽  
Growing Economy ◽  
The One

Even in perfect competition there is a positive profit return if the good is produced with decreasing returns to scale technology. Using a two-periods overlapping generations (OLG) model with production under perfect competition with decreasing returns to scale technology in which the economy grows by technological progress and the older generation consumers receive the profit returns, we consider the problem of budget deficit under economic growth. We will show the following results. 1) We need a budget deficit to achieve full employment under constant price when the economy grows by technological progress. 2) If the budget deficit exceeds the level necessary to maintain full employment in a growing economy under constant price, inflation will be triggered. We need a stable budget deficit to prevent further inflation. 3) If the budget deficit is insufficient to maintain full employment, it will cause a recession with involuntary unemployment. We can overcome a recession and restore full employment caused by insufficient budget deficit by a budget deficit larger than the one necessary and sufficient to maintain full employment without a recession. We should not offset the deficit created to overcome the recession by subsequent surpluses because we can maintain full employment through constant budget deficits. Also, we show that in each case the budget deficit equals the difference between the net savings of the younger generation consumers and that of the older generation consumers.

scholarly journals An Elementary Mathematical Model for MMT (Modern Monetary Theory)

2021 ◽  
Vol 13 (3) ◽  
pp. 1
Author(s):  
Yasuhito Tanaka
Keyword(s):  
Technological Progress ◽  
Utility Maximization ◽  
Budget Deficit ◽  
Monopolistic Competition ◽  
Full Employment ◽  
Supply And Demand ◽  
Profit Maximization ◽  
Static Model ◽  
Monetary Theory ◽  
Necessary And Sufficient

In recent years, a school of economics called MMT (Modern Monetary Theory) has been attracting attention, but it has not been analyzed theoretically or mathematically. This study aims to provide a theoretical basis for the skeleton of the MMT argument, while maintaining the basics of the neoclassical microeconomic framework, such as utility maximization of consumers by means of utility functions and budget constraint, profit maximization of firms in monopolistic competition, and equilibrium of supply and demand of goods. Using a simple static model that includes economic growth due to technological progress, we will argue that: 1) a continuous budget deficit is necessary to maintain full employment when the economy is growing, and that this deficit does not have to be covered by future surpluses; 2) Inflation is caused when the actual budget deficit exceeds the level necessary and sufficient to maintain full employment. In order to avoid further inflation, it is necessary to maintain a certain level of budget deficit; 3) A shortfall in the budget deficit leads to recession and involuntary unemployment. To recover from this, a budget deficit that exceeds the level necessary to maintain full employment is required. However, since a continuous budget deficit is necessary after full employment is restored, the deficit created to overcome the recession does not need to be covered by future budget surpluses, nor should it be.

scholarly journals Current Trends in Technical and Technological Development

2020 ◽  
Vol 12 (515) ◽  
pp. 47-52
Author(s):  
Y. V. Dubiei ◽  
Keyword(s):  
Information And Communication Technologies ◽  
Economic History ◽  
Technological Progress ◽  
Full Employment ◽  
Technological Development ◽  
Technological Leadership ◽  
New Knowledge ◽  
The World ◽  
Information And Communication ◽  
Labor Resources

The article is concerned with the main trends of technical and technological development, which are characteristic of the world economy in the 21st century. The facts of economic history relating to technical and technological development demonstrate the periodic change in technological leadership of certain countries of the world. The system of indicators is singled out, on the basis of which the country’s place in the global technological space is diagnosed, as well as the forecasting of further trends in its development on the path of scientific and technological progress is carried out. Based on the world rankings on the total domestic costs of science, their share in the gross domestic product of the country, the cost of R&D per researcher (equivalent to full employment) shows the provisions of individual countries as to financial support of technical and technological development. The research potential is described on the basis of such indicator as the total number of researchers in a particular country. It is demonstrated that these indicators, describing in its totality the level of provision of a particular country with financial and labor resources, through which new knowledge is created, do not always indicate its success. With the involvement of the indicators of research and patent activity (which reflect the number of published articles and submitted applications for patents), as well as the global index of innovations, plus the index of development of information and communication technologies (which characterize the result of technical and technological development achieved by the country), the directions of advancement of countries in terms of technology and technology are determined. It is identified that the provision of resources for the production of new knowledge is a necessary, but insufficient condition for obtaining technological primacy in the world. It is proposed to evaluate the positions achieved by the country on the path of technical and technological development through the formation of an internal indicator, which reflects both its provision of resources for the production of new knowledge and the degree of return on their use. It is proved that this approach to the evaluation of technical and technological development allows to obtain more thorough information about its sources and factors, as well as to identify weaknesses on which the country should focus to promote scientific and technological progress.

Fourth industrial revolution and India's “employment problem”

2020 ◽  
Vol 47 (7) ◽  
pp. 851-866
Author(s):  
Sujatra Bhattacharyya ◽  
Arup Mitra
Keyword(s):  
Productivity Growth ◽  
Technological Progress ◽  
Industrial Revolution ◽  
Employment Growth ◽  
Capital Intensity ◽  
Industrial Sector ◽  
Content Type ◽  
Employment Problem ◽  
Fourth Industrial Revolution ◽  
The Impact

PurposeThis paper aims at assessing the impact of innovation on productivity as sustainable development can be attained primarily through non-resource-driven growth. Secondly, it also proposes to reflect on the rising capital intensity in the Indian industries as technology advancement, particularly in the light of the fourth industrial revolution, is expected to reduce the labour absorbing capacity of the industrial sector.Design/methodology/approachBased on panel data for different Indian firms in various groups of industries, this paper estimates TFPG and TE (following Cornwell et al. methodology) and assesses the impact of R&D expenditure on the performance indices. Secondly, it measures the capital intensity across various groups of industries to reflect on the “employment problem”.FindingsInnovation does not seem to enhance the performance index in a very significant manner across industry groups considered in the study. The lack of extensive evidence on impact of innovation on total factor productivity growth suggests that innovation does not necessarily result in technological progress while the need of the hour is to experience non-resource-driven growth on the one hand and employment growth on the other. The positive impact of innovation on efficiency as seen in the paper can be interpreted as the expenditure incurred to realize the potentiality of the technology which is possibly imported. However, capital accumulation is resulting in rapid productivity growth at the cost of employment.Research limitations/implicationsCapturing technological progress in terms of TFPG can be subjected to criticism.Practical implicationsPolicy implications for employment generation and inclusive growth are derived.Social implicationsThe study cautions us about the adverse implications in terms of employment growth.Originality/valueAssessing the impact of innovation on performance such as TFPG and TE is rather rare in the literature, and this paper tries to reflect on this aspect using the Indian firm-level data. Secondly, the trade-offs between productivity growth and employment growth are brought out distinctly in order to highlight the declining labour absorbing capacity of the industrial sector. This enables us to reflect on the adverse consequences of the fourth industrial revolution.

scholarly journals Very Simple Mathematical Model of MMT (Modern Monetary Theory)

2021 ◽  
Vol 11 (3) ◽  
pp. 78
Author(s):  
Yasuhito Tanaka
Keyword(s):  
Technological Progress ◽  
Budget Deficit ◽  
Full Employment ◽  
Returns To Scale ◽  
Perfect Competition ◽  
Monetary Theory ◽  
Budget Deficits ◽  
Growing Economy ◽  
The One ◽  
Constant Returns To Scale

The purpose of this paper is to provide a concise theoretical and mathematical foundation for the major parts of the debate in the recently discussed school of economics called Modern Monetary Theory (MMT), while maintaining the basics of the neoclassical microeconomic framework, such as utility maximization of consumers using budget constraints and utility functions, and equilibrium of demand and supply of goods under perfect competition with constant returns to scale technology. By a two-periods overlapping generations (OLG) model in which the economy grows by technological progress, we will show that: 1) We need a budget deficit to achieve full employment with constant price when the economy grows by technological progress. This budget deficit should not be offset by future surplus; 2) A budget deficit that exceeds the level necessary to maintain full employment in a growing economy with constant price will cause inflation. A stable budget deficit is required to prevent further inflation; 3) A budget deficit that is insufficient to maintain full employment will cause a recession with involuntary unemployment. A budget deficit larger than the one necessary and sufficient to maintain full employment without a recession can overcome a recession caused by insufficient budget deficit and restore full employment. The deficit created to overcome the recession should not be offset by subsequent surpluses, since full employment can then be maintained through constant budget deficits.

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