IDEAS home Printed from https://ideas.repec.org/h/eme/rpeczz/s0161-723020170000032006.html
   My bibliography  Save this book chapter

Biased Technical Change and Economic Growth: The Case of Korea, 1970–2013

In: Return of Marxian Macro-Dynamics in East Asia

Author

Listed:
  • Sangjun Jeong

Abstract

This paper explores the pattern of technical change in the Korean economy from 1970 to 2013 and investigates its determinants. We use the Classical growth-distribution schedule to show that the labor-saving and capital-using pattern has predominated. For the rationale behind this Marx-biased technical change, we focus on the relationship between technical change and real wage growth via the evolution of labor and capital productivity, and verify the historical direction of technical change against the rise and fall of the working class. Furthermore, we find that the deviation during the post-crisis period from the long-run trend of Marx-biased technical change is not attributable to the vitality of new technological innovations, but rather the reflection of class dynamics over extracting productivity under weaker capital deepening. The results suggest that the recent deterioration of labor share and labor unions in Korea is closely associated with low incentive for technological progress, which contributes to prolonged stagnation.

Suggested Citation

  • Sangjun Jeong, 2017. "Biased Technical Change and Economic Growth: The Case of Korea, 1970–2013," Research in Political Economy, in: Return of Marxian Macro-Dynamics in East Asia, volume 32, pages 81-103, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:rpeczz:s0161-723020170000032006
    DOI: 10.1108/S0161-723020170000032006
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0161-723020170000032006/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0161-723020170000032006/full/epub?utm_source=repec&utm_medium=feed&utm_campaign=repec&title=10.1108/S0161-723020170000032006
    Download Restriction: no

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0161-723020170000032006/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no

    File URL: https://libkey.io/10.1108/S0161-723020170000032006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. C. W. M. Naastepad, 2006. "Technology, demand and distribution: a cumulative growth model with an application to the Dutch productivity growth slowdown," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(3), pages 403-434, May.
    2. Fabrizio Ferretti, 2008. "Patterns of technical change: a geometrical analysis using the wage-profit rate schedule," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(5), pages 565-583.
    3. Saten Kumar & Don J. Webber & Geoff Perry, 2012. "Real wages, inflation and labour productivity in Australia," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.
    4. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    5. Ochoa, Eduardo M, 1989. "Values, Prices, and Wage-Profit Curves in the U.S. Economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(3), pages 413-429, September.
    6. Adalmir Marquetti, 2004. "Do Rising Real Wages Increase The Rate Of Labor‐Saving Technical Change? Some Econometric Evidence," Metroeconomica, Wiley Blackwell, vol. 55(4), pages 432-441, November.
    7. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 719-741, September.
    8. Stephanie Seguino, 2000. "The Investment Function Revisited: Disciplining Capital in South Korea," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 22(2), pages 313-338, January.
    9. Marquetti, Adalmir A., 2003. "Analyzing historical and regional patterns of technical change from a classical-Marxian perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 191-200, October.
    10. Joao Paulo A. de Souza, 2014. "Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies," UMASS Amherst Economics Working Papers 2014-03, University of Massachusetts Amherst, Department of Economics.
    11. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    12. Bildirici, Melike & Alp, Aykaç, 2008. "The Relationship Between Wages and Productivity: TAR Unit Root and TAR Cointegration Approach," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 5(1), pages 93-110.
    13. Federico Lucidi & Alfred Kleinknecht, 2010. "Little innovation, many jobs: An econometric analysis of the Italian labour productivity crisis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 34(3), pages 525-546.
    14. Eckhard Hein & Artur Tarassow, 2010. "Distribution, aggregate demand and productivity growth: theory and empirical results for six OECD countries based on a post-Kaleckian model," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 34(4), pages 727-754.
    15. Christian Schoder, 2012. "Endogenous capital productivity in the Kaleckian growth model. Theory and Evidence," IMK Working Paper 102-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    16. Ra, Young-Sun & Shim, Kyung Woo, 2009. "The Korean case study : past experience and new trends in training policies," Social Protection Discussion Papers and Notes 53696, The World Bank.
    17. Thomas R. Michl, 1992. "Capital and Labor Productivity," Review of Radical Political Economics, Union for Radical Political Economics, vol. 24(2), pages 45-50, June.
    18. Mario Cassetti, 2003. "Bargaining power, effective demand and technical progress: a Kaleckian model of growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(3), pages 449-464, May.
    19. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    20. Eckhard Hein, 2008. "Money, Distribution Conflict and Capital Accumulation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59560-6, March.
    21. Hyunbae CHUN & MIYAGAWA Tsutomu & Hak Kil PYO & TONOGI Konomi, 2015. "Do Intangibles Contribute to Productivity Growth in East Asian Countries? Evidence from Japan and Korea," Discussion papers 15055, Research Institute of Economy, Trade and Industry (RIETI).
    22. Werner Holzl, 2010. "Was there a Marxian bias in Austrian manufacturing? Evidence on the direction of technical change, 1978-1994," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(1), pages 35-56.
    23. Heinz Kurz, 2010. "Technical progress, capital accumulation and income distribution in Classical economics: Adam Smith, David Ricardo and Karl Marx," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(5), pages 1183-1222.
    24. Duncan K. Foley & Adalmir A. Marquetti, 1999. "Productivity, Employment and Growth in European Integration," Metroeconomica, Wiley Blackwell, vol. 50(3), pages 277-300, October.
    25. Felipe, Jesus & Laviña, Editha & Fan, Emma Xiaoqin, 2008. "The Diverging Patterns of Profitability, Investment and Growth of China and India During 1980-2003," World Development, Elsevier, vol. 36(5), pages 741-774, May.
    26. repec:bla:apacel:v:19:y:2005:i:2:p:42-59 is not listed on IDEAS
    27. Deepankar Basu, 2010. "Marx‐Biased Technical Change And The Neoclassical View Of Income Distribution," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 593-620, November.
    28. Simon Mohun, 2009. "Aggregate capital productivity in the US economy, 1964--2001," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(5), pages 1023-1046, September.
    29. Vaona, Andrea, 2011. "Profit rate dynamics, income distribution, structural and technical change in Denmark, Finland and Italy," Structural Change and Economic Dynamics, Elsevier, vol. 22(3), pages 247-268, September.
    30. You, Jong-Il, 1994. "Macroeconomic Structure, Endogenous Technical Change and Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 18(2), pages 213-234, April.
    31. Ednaldo Araquém da Silva, 1991. "The Wage-Profit Curve in Brazil: an Input-Output Model with Fixed Capital, 1975," Review of Radical Political Economics, Union for Radical Political Economics, vol. 23(1-2), pages 104-110, March.
    32. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    33. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    34. You, Jong-Il & Chang, Ha-Joon, 1993. "The Myth of Free Labour Market in Korea," Contributions to Political Economy, Cambridge Political Economy Society, vol. 12(0), pages 29-46.
    35. Ms. Chie Aoyagi & Mr. Giovanni Ganelli, 2013. "The Path to Higher Growth: Does Revamping Japan’s Dual Labor Market Matter?," IMF Working Papers 2013/202, International Monetary Fund.
    36. R. C. Allen, 2011. "Why the industrial revolution was British: commerce, induced invention, and the scientific revolution," Economic History Review, Economic History Society, vol. 64(2), pages 357-384, May.
    37. Marc Lavoie & Stockhammer Engelbert, 2013. "Wage-Led Growth: An Equitable Strategy for Economic Recovery," Post-Print hal-01343664, HAL.
    38. Groll, Shalom & Orzech, Ze'ev B, 1990. "Marx's Social Dynamics and Neutral Technical Progress: A Contradiction?," Australian Economic Papers, Wiley Blackwell, vol. 29(54), pages 85-100, June.
    39. Robert Vergeer & Alfred Kleinknecht, 2010. "The impact of labor market deregulation on productivity: a panel data analysis of 19 OECD countries (1960-2004)," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 33(2), pages 371-408, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hein, Eckhard, 2011. "Distribution, 'financialisation' and the financial and economic crisis: Implications for post-crisis economic policies," IPE Working Papers 09/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Joao Paulo A. de Souza, 2014. "Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies," UMASS Amherst Economics Working Papers 2014-03, University of Massachusetts Amherst, Department of Economics.
    3. Eckhard Hein, 2017. "Post-Keynesian macroeconomics since the mid 1990s: main developments," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 131-172, September.
    4. Michael Gaul, 2024. "A Discussion of Marx’s Account of Technical Progress by Means of Wage Curves and Their Historical Evolution," Review of Radical Political Economics, Union for Radical Political Economics, vol. 56(2), pages 267-299, June.
    5. Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 475-496.
    6. Eckhard Hein, 2012. "The Macroeconomics of Finance-Dominated Capitalism – and its Crisis," Books, Edward Elgar Publishing, number 14931.
    7. Roberto Veneziani & Luca Zamparelli & Daniele Tavani & Luca Zamparelli, 2017. "Endogenous Technical Change In Alternative Theories Of Growth And Distribution," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1272-1303, December.
    8. Marwil J. Dávila-Fernández, 2018. "Alternative Approaches to Technological Change when Growth is BoPC," Department of Economics University of Siena 795, Department of Economics, University of Siena.
    9. Parui, Pintu, 2021. "Financialization and endogenous technological change: A post-Kaleckian perspective," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 221-244.
    10. Engelbert Stockhammer & Ozlem Onaran, 2013. "Wage-led growth: theory, evidence, policy," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(1), pages 61-78, January.
    11. Betül Mutlugün, 2022. "Endogenous income distribution and aggregate demand: Empirical evidence from heterogeneous panel structural vector autoregression," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 583-637, May.
    12. Lavoie, M. & Stockhammer, Engelbert,, 2012. "Wage-led growth : concepts, theories and policies," ILO Working Papers 994709363402676, International Labour Organization.
    13. Hein, Eckhard, & Mundt, Matthias., 2012. "Financialisation and the requirements and potentials for wage-led recovery : a review focussing on the G20," ILO Working Papers 994709323402676, International Labour Organization.
    14. Marquetti, Adalmir & Porsse, Melody de Campos Soares, 2014. "Patterns of technical progress in the Brazilian economy, 1952-2008," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    15. Storm, Servaas. & Naastepad, C.W.M.,, 2012. "Wage-led or profit-led supply : wages, productivity and investment," ILO Working Papers 994709303402676, International Labour Organization.
    16. Santos, João & Domingos, Tiago & Sousa, Tânia & St. Aubyn, Miguel, 2016. "Does a small cost share reflect a negligible role for energy in economic production? Testing for aggregate production functions including capital, labor, and useful exergy through a cointegration-base," MPRA Paper 70850, University Library of Munich, Germany.
    17. Robert A. Blecker, 2016. "Wage-led versus profit-led demand regimes: the long and the short of it," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 373-390, October.
    18. Olivier Allain, 2006. "La modération salariale : le point de vue des (néo-)kaleckiens," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196500, HAL.
    19. Jochen Hartwig, 2014. "Testing the Bhaduri-Marglin model with OECD panel data," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(4), pages 419-435, July.
    20. Cem Oyvat & Oğuz Öztunalı & Ceyhun Elgin, 2020. "Wage‐led versus profit‐led demand: A comprehensive empirical analysis," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 458-486, July.

    More about this item

    Keywords

    Growth-distribution schedule; Marx-biased technical change; labor productivity; capital productivity;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:rpeczz:s0161-723020170000032006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.