Economic Growth and Factor Substitution

1967 ◽  
Vol 8 (2) ◽  
pp. 243 ◽  
Author(s):  
Murray C. Kemp ◽  
Eytan Sheshinski ◽  
Pham Chi Thanh
Keyword(s):  
Economic Growth ◽  
Factor Substitution

FACTOR SUBSTITUTION AND ECONOMIC GROWTH: A UNIFIED APPROACH

2012 ◽  
Vol 16 (4) ◽  
pp. 625-656 ◽  
Author(s):  
Jianpo Xue ◽  
Chong K. Yip
Keyword(s):  
Economic Growth ◽  
Steady State ◽  
Growth Models ◽  
Elasticity Of Substitution ◽  
Unified Approach ◽  
Factor Income ◽  
Factor Substitution ◽  
State Income ◽  
Per Capita ◽  
Relative Scarcity

This paper provides a unified approach to characterizing the relation between factor substitution and economic growth in different one-sector growth models (namely, the Solow, Ramsey, and Diamond models). Our main finding is that if better factor substitution raises savings in the steady state, then a higher per capita income results. There are two channels by which factor substitution affects savings: the positive efficiency effect via income and the ambiguous distribution effect via factor income shares. If the efficiency effect dominates, then a higher elasticity of substitution leads to a higher level of per capita steady-state income. In transition, factor substitution affects the rate of convergence both directly and through the equilibrium profit share. The former arises from diminishing marginal productivity of capital whereas the latter reflects its relative scarcity. Depending on the interaction of these effects, the net outcomes are characterized.

TELECOMMUNICATIONS, FACTOR SUBSTITUTION AND ECONOMIC GROWTH

1997 ◽  
Vol 15 (3) ◽  
pp. 21-31 ◽  
Author(s):  
FRANCIS J. CRONIN ◽  
ELISABETH COLLERAN ◽  
MARK GOLD
Keyword(s):  
Economic Growth ◽  
Factor Substitution

Factor Substitution, Average Firm Size and Economic Growth

2006 ◽  
Vol 26 (3) ◽  
pp. 203-214 ◽  
Author(s):  
Matteo Aquilina ◽  
Rainer Klump ◽  
Carlo Pietrobelli
Keyword(s):  
Economic Growth ◽  
Firm Size ◽  
Factor Substitution

Economic Growth and Factor Substitution

1964 ◽  
Vol 5 (3) ◽  
pp. 318 ◽  
Author(s):  
Ken-Ichi Inada
Keyword(s):  
Economic Growth ◽  
Factor Substitution
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