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In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate … of output per worker is shown to increase in the elasticity of substitution between capital and labor. This confirms the … aggregate output. -- capital accumulation ; elasticity of substitution ; direction of technical change ; neoclassical growth …
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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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