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Tasks, technology, and factor prices in the neoclassical production sector

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  • Andreas Irmen

    (University of Luxembourg
    CESifo, Munich)

Abstract

This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies. We show that the effect of factor-augmenting technical change on relative and absolute factor prices can be decomposed into a productivity effect and a task-demand effect of opposite sign. These effects appear since the novel task-based approach distinguishes between the demands for tasks and the demands for factors. This perspective provides a new intuition for the emergence of relative and absolute factor biases and the role of the elasticity of substitution.

Suggested Citation

  • Andreas Irmen, 2020. "Tasks, technology, and factor prices in the neoclassical production sector," Journal of Economics, Springer, vol. 131(2), pages 101-121, October.
    • Handle: RePEc:kap:jeczfn:v:131:y:2020:i:2:d:10.1007_s00712-020-00705-9
    DOI: 10.1007/s00712-020-00705-9
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    Cited by:

    1. Andreas Irmen, 2020. "Tasks, technology, and factor prices in the neoclassical production sector," Journal of Economics, Springer, vol. 131(2), pages 101-121, October.
    2. Oscar Afonso & Tiago Sequeira & Derick Almeida, 2023. "Technological knowledge and wages: from skill premium to wage polarization," Journal of Economics, Springer, vol. 140(2), pages 93-119, October.

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    More about this item

    Keywords

    Technical change; Factor prices; Factor-specific tasks; Neoclassical production;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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