Kemp-Benedict, E. orcid.org/0000-0001-5794-7172 (2024) Cost share-induced technological change: An analytical classical-evolutionary model. Journal of Evolutionary Economics, 34. pp. 515-567. ISSN 0936-9937
Abstract
This paper builds on prior work by the author on cost share-induced technological change. The theoretical model views selection of candidate innovations as a capital budgeting exercise. In this paper it treats the case in which firms target an incremental rate of profit, which introduces a nonzero threshold into a “selection frontier”. This presents analytical challenges, which are resolved in this paper by assuming that the probability distribution of potential increases in productivity among the set of fit innovations is normal. That permits an explicit derivation of a micro-level model of cost share-induced technological change that can be taken as a candidate functional form for an aggregate model. The model is calibrated against historical data for India, China, and the United States, three large continental economies at different levels of per capita GDP. The model is able to fit the data with reasonable fidelity, and the fitted model parameters can be given a reasonable interpretation. The paper further shows that combining cost share-induced technological change with price-setting behavior produces theoretically interesting results.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © The Author(s) 2024. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. |
Keywords: | Technological change, Evolutionary, Classical, Neo-Marxian |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Environment (Leeds) > School of Earth and Environment (Leeds) > Sustainability Research Institute (SRI) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 05 Sep 2024 12:19 |
Last Modified: | 15 Oct 2024 13:42 |
Status: | Published |
Publisher: | Springer |
Identification Number: | 10.1007/s00191-024-00869-3 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:216839 |