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This paper addresses the relationship between technical change and the elasticity of substitution between factors of production. It is shown how the elasticity within a CES production setting can change due to technical change. Technical change is interpreted in the spirit of horizontal...
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substitution between capital and labour which is greater than 1, the economy always reaches a unique and stable steady state which … states, of which one is stable while the other is not, which could, depending on the value of the initial capital stock … international growth experiences. The capital biased technical change generated by a higher value of this parameter improves …
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