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Technologies for Endogenous Growth

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  • Federico Etro

Abstract

I microfound endogenous growth through neoclassical technologies with substitutable inputs created by monopolistically competitive innovators. Investment delivers innovations of declining profitability, but increasing labor force generates growth depending on structural technological parameters that determine the elasticities of profits and output relative to the mass of inputs. With a Cobb-Douglas technology in labor and a CES aggregator of inputs growth declines with the substitutability between inputs, with a nested CES technology growth vanishes as long as the substitutability between labor and inputs is less than unitary, and with a Diewert technology growth is sustainable for a high share of inputs in production.

Suggested Citation

  • Federico Etro, 2021. "Technologies for Endogenous Growth," Working Papers - Economics wp2021_20.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2021_20.rdf
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    2. Gilad Sorek, 2024. "Schumpeterian Growth with Variable Demand Elasticity," Auburn Economics Working Paper Series auwp2024-04, Department of Economics, Auburn University.

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    More about this item

    Keywords

    Long-run growth; Semi-endogenous growth; input substitutability; population; technology.;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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