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- Title
Endogenous capital-augmenting R&D, intersectoral labor reallocation, and the movement of the labor share.
- Authors
Zhang, Pengfei
- Abstract
I construct a hybrid model of endogenous and semi-endogenous growth to analyze the impact of labor reallocation between capital-augmenting R&D and final-goods production. By affecting the price of capital-intensive goods, factor-augmenting technical change or capital deepening will induce intersectoral labor reallocation between capital-augmenting R&D and final-goods production. The intersectoral labor reallocation in this paper can reverse some seemingly fundamental implications of the neoclassical growth models. In particular, given the gross complementarity of capital and labor, intersectoral labor reallocation implies that capital-augmenting technical change or capital deepening decreases the labor share, while labor-augmenting technical change increases the labor share. In the present model, a strengthening of the capital-augmenting R&D spillover effect helps to increase the importance of investment-specific technology and reduce the relative price of investment goods.
- Subjects
LABOR movement; ENDOGENOUS growth (Economics); INDUSTRIAL relations; LABOR mobility; PRICES
- Publication
Journal of Economics, 2023, Vol 140, Issue 1, p1
- ISSN
0931-8658
- Publication type
Article
- DOI
10.1007/s00712-023-00828-9