This note presents a simple extension of the seminal Romer (1990, Journal of Political Economy 98(2), 71â102) paper. Allowing for elasticity of substitution between labor and capital to be different from one (CES production function instead of CobbâDouglas), the following results are obtained....

We present an endogenous growth model where innovations are factor saving. Technologies can be changed paying a cost and technological change takes place only if the benefits are larger than the costs. Since the gains derived from factor saving innovations depend on factor abundance, biased...