This paper analyses how technological progress embodied in capital goods raises productivity and income, while at the … same time it can modify the allocation of consumption, investment and the capital stock. With capital …, a shock to the process of capital-embodied technological progress is shown not to raise investment as much as could be …

investment is muted, thereby avoiding substantial discards of old capital goods, which are made obsolete more than usual. By … marginal unit of capital so that they reflect their market value, the reaction of new investment remains limited while the … shock and avoid further discards of old capital goods in the production process by limiting new investment …

consumption and private investment via an increase in labor income, and decreased the general price of goods and service. Third …