Factor Saving Innovations and Factor Income Shares


  • Documentos de trabajo


  • We present an endogenous growth model where innovation is factor saving. Technologies can be changed paying a cost so, technological change take place only if the benefits are larger than the cost. Since the gains derived from factor saving innovations depend on factor abundance, biased innovations respond to changes in factor supply, that is, as economy becomes more capital abundant agents try to use in a more intensively. Therefore (a) the elasticity of the output with respect to reproducible factors depends on the capital abundance of the economy and (b) the income share of reducible factors increase as the economy growths. Another insight of the model is that in some economies the production function converges to an AK in the long run, while in others long run growths is cero.

fecha de publicación

  • 2006-09

Líneas de investigación

  • Capital Using and Labor Saving Innovations
  • Endogenous Growth
  • Factor Income Shares


  • 2706