[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/fec/journl/v11y2016i3p498-518.html
   My bibliography  Save this article

A Dynamic Model of the Choice of Technology in Economic Development

Author

Listed:
  • Haiwen Zhou

    (Department of Economics, Old Dominion University, Norfolk, VA 23529, USA)

  • Ruhai Zhou

    (Department of Mathematics and Statistics, Old Dominion University, Norfolk, VA 23529, USA)

Abstract
In this overlapping-generations model, there is unemployment in the manufacturing sector. Manufacturing firms engage in oligopolistic competition and choose technologies to maximize profits. With capital as a fixed cost of production, increasing returns in the manufacturing sector exist. In the unique steady state, first, when individuals become more patient, the savings rate increases while the level of an individual¡¯s income decreases. Second, an increase in population or percentage of income spent on manufactured goods does not change steady-state technology while the level of an individual¡¯s income decreases. Third, an increase in the wage rate leads manufacturing firms to choose more advanced technologies and the steady-state capital stock increases. Finally, an increase in the level of subsidies to technology adoption does not change steady-state technology.

Suggested Citation

  • Haiwen Zhou & Ruhai Zhou, 2016. "A Dynamic Model of the Choice of Technology in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 11(3), pages 498-518, September.
    • Handle: RePEc:fec:journl:v:11:y:2016:i:3:p:498-518
    as

    Download full text from publisher

    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-005-016-0026-4
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Junxi Zhang, 2007. "Endogenous Markups, Intensity of Competition, and Persistence of Business Cycles," Southern Economic Journal, John Wiley & Sons, vol. 74(2), pages 546-565, October.
    2. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-918, November.
    3. Jie Zhang, 2002. "Urbanization, population transition, and growth," Oxford Economic Papers, Oxford University Press, vol. 54(1), pages 91-117, January.
    4. Drazen, Allan & Eckstein, Zvi, 1988. "On the Organization of Rural Markets and the Process of Economic Development," American Economic Review, American Economic Association, vol. 78(3), pages 431-443, June.
    5. Bencivenga, Valerie R & Smith, Bruce D, 1997. "Unemployment, Migration, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 582-608, June.
    6. Haiwen Zhou, 2015. "Unemployment and Economic Integration for Developing Countries," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 10(4), pages 664-690, December.
    7. Haiwen Zhou, 2009. "Population Growth And Industrialization," Economic Inquiry, Western Economic Association International, vol. 47(2), pages 249-265, April.
    8. Keijiro Otsuka & Gustav Ranis & Gary Saxonhouse, 1988. "Comparative Technology Choice in Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-19140-6, March.
    9. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    10. Frances Stewart, 1978. "Technology and Underdevelopment," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-15932-1, December.
    11. Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2011. "China has reached the Lewis turning point," China Economic Review, Elsevier, vol. 22(4), pages 542-554.
    12. Haiwen Zhou, 2013. "The Choice of Technology and Rural-Urban Migration in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(3), pages 337-361, September.
    13. White, Lawrence J, 1978. "The Evidence on Appropriate Factor Proportions for Manufacturing in Less Developed Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 27(1), pages 27-59, October.
    14. Ming Chen & Yeung-Nan Shieh, 2011. "Specific commodity taxes, output and location decision under free entry oligopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 25-36, August.
    15. Ashok Kotwal & Bharat Ramaswami & Wilima Wadhwa, 2011. "Economic Liberalization and Indian Economic Growth: What's the Evidence?," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1152-1199, December.
    16. Turnovsky,Stephen J., 1977. "Macroeconomic Analysis and Stabilization Policy," Cambridge Books, Cambridge University Press, number 9780521291873, September.
    17. Gang, Ira N. & Gangopadhyay, Shubhashis, 1987. "Employment, output and the choice of techniques : The trade-off revisited," Journal of Development Economics, Elsevier, vol. 25(2), pages 321-327, April.
    18. N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economic Development Technological Change, and Growth > Technological Change: Choices and Consequences

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haiwen Zhou, 2019. "Resource abundance, market size, and the choice of technology," Bulletin of Economic Research, Wiley Blackwell, vol. 71(4), pages 641-656, October.
    2. Yu Chen & Haiwen Zhou, 2017. "An Overlapping-Generations Model of Firm Heterogeneity in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 12(4), pages 660-676, December.
    3. Orlando Gomes, 2022. "Human capital and growth in an OLG-life cycle model," SN Business & Economics, Springer, vol. 2(1), pages 1-26, January.

    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. Haiwen Zhou, 2013. "The Choice of Technology and Rural-Urban Migration in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(3), pages 337-361, September.
    2. Haiwen Zhou, 2015. "Unemployment and Economic Integration for Developing Countries," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 10(4), pages 664-690, December.
    3. Haiwen Zhou, 2015. "The Choice of Technology and Equilibrium Wage Rigidity," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 10(2), pages 252-271, June.
    4. Haiwen Zhou, 2019. "Resource abundance, market size, and the choice of technology," Bulletin of Economic Research, Wiley Blackwell, vol. 71(4), pages 641-656, October.
    5. Lei Wen & Haiwen Zhou, 2023. "The choice of technology in economic development," Australian Economic Papers, Wiley Blackwell, vol. 62(4), pages 747-763, December.
    6. Haiwen Zhou, 2020. "Monitoring Intensity and Technology Choice in a Model of Unemployment," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(3), pages 504-520, June.
    7. Haiwen Zhou, 2021. "Fixed Costs and the Division of Labor," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 63-81, May.
    8. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
    9. Constantine Angyridis & Haiwen Zhou, 2022. "Search, technology choice, and unemployment," International Studies of Economics, John Wiley & Sons, vol. 17(3), pages 296-310, September.
    10. Monchuk, Daniel C. & Miranowski, John A., 2002. "The Effect Of Innovative Behavior And Technological Spillovers On Employment Growth In The Us Midwest," 2002 Annual meeting, July 28-31, Long Beach, CA 19773, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Bencivenga, Valerie R & Smith, Bruce D, 1997. "Unemployment, Migration, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 582-608, June.
    12. Yu Chen & Haiwen Zhou, 2017. "An Overlapping-Generations Model of Firm Heterogeneity in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 12(4), pages 660-676, December.
    13. Haiwen Zhou, 2023. "Impact of international trade under dual labor markets," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 917-934, October.
    14. Jonathan Temple, 2002. "Wage Inequality in a Dual Economy," Bristol Economics Discussion Papers 02/531, School of Economics, University of Bristol, UK.
    15. Haiwen Zhou, 2011. "Factor Returns and Circular Causality," Southern Economic Journal, John Wiley & Sons, vol. 77(3), pages 795-805, January.
    16. Haiwen Zhou, 2019. "Coordination Costs, Market Size, and the Choice of Technology," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 14(1), pages 131-148, March.
    17. Vincenzo Lombardo, 2012. "Modern foundations of dual economy models," Discussion Papers 8_2012, CRISEI, University of Naples "Parthenope", Italy.
    18. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, School of Economics, University of Bristol, UK.
    19. Raymond Riezman & Ping Wang & Eric Bond, 2012. "Trade, Urbanization and Capital Accumulation in a Labor Surplus Economy," 2012 Meeting Papers 776, Society for Economic Dynamics.
    20. Wei-Bin Zhang, 2008. "A Two-Sector Growth Model with Endogenous Human Capital and Amenities," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 6(2), pages 95-116.

    More about this item

    Keywords

    choice of technology; overlapping-generations model; unemployment; economic development; increasing returns;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

    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:fec:journl:v:11:y:2016:i:3:p:498-518. 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: Frank H. Liu (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.