Document Type
Article
Publication Date
2023
DOI
10.1111/1467-8454.12311
Publication Title
Australian Economic Papers
Volume
62
Issue
4
Pages
747-763
Abstract
The impact of capital accumulation on job creation is an important and interesting issue in economic development. This model provides a general-equilibrium framework for studying technology choice with unemployment in a developing economy based on micro-foundations. Unemployment in the urban sector results from the existence of efficiency wages. Manufacturing firms engage in oligopolistic competition and choose technologies to maximise profits. A more advanced technology uses more capital and less labour. In the steady state, an increase in the amount of capital induces firms to choose more advanced technologies and the wage rate increases. While a higher capital stock always induces firms to choose more advanced technologies, urban unemployment rate may decrease and agricultural sector employment may increase.
Rights
© 2023 The Authors
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
ORCID
0000-0002-1929-3347 (Zhou)
Original Publication Citation
Wen, L., & Zhou, H. (2023). The choice of technology in economic development. Australian Economic Papers, 62(4), 747-763. https://doi.org/10.1111/1467-8454.12311
Repository Citation
Wen, Lei and Zhou, Haiwen, "The Choice of Technology in Economic Development" (2023). Economics Faculty Publications. 67.
https://digitalcommons.odu.edu/economics_facpubs/67