Document Type

Article

Publication Date

2016

DOI

10.3868/s060-005-016-0026-4

Publication Title

Frontiers of Economics in China

Volume

11

Issue

3

Pages

498-518

Abstract

In this overlapping-generations model, there is unemployment in the manufacturing sector. Manufacturing firms engage in oligopolistic competition and choose technologies to maximize profits. With capital as a fixed cost of production, increasing returns in the manufacturing sector exist. In the unique steady state, first, when individuals become more patient, the savings rate increases while the level of an individual’s income decreases. Second, an increase in population or percentage of income spent on manufactured goods does not change steady-state technology while the level of an individual’s income decreases. Third, an increase in the wage rate leads manufacturing firms to choose more advanced technologies and the steady-state capital stock increases. Finally, an increase in the level of subsidies to technology adoption does not change steady-state technology.

Rights

© 2016 Higher Education Press. All Rights Reserved.

Included with the kind written permission of the publishers.

Comments

Direct link to article online: https://journal.hep.com.cn/fec/EN/10.3868/s060-005-016-0026-4

ORCID

0000-0002-9049-0546 (Zhou, Ruhai)

Original Publication Citation

Zhou, H., & Zhou, R. (2016). A dynamic model of the choice of technology in economic development. Frontiers of Economics in China, 11(3), 498-518. https://journal.hep.com.cn/fec/EN/10.3868/s060-005-016-0026-4

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