Machines as Engines of Growth

Zeira, Joseph (2006) Machines as Engines of Growth. [Discussion Paper]. p. 36. DEGIT Conference Papers (No. c011_059). (Submitted)

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Abstract/Index

This paper builds a model of growth through industrialization, where machines replace workers in a growing number of tasks. This enables the economy to experience long-run growth, as machines become servants of humans, and as their number grows unboundedly. The mechanism that drives growth is feedback between industrialization and wages. High wages provide incentives to use machines, while industrialization raises wages. The model shows that industrialization and growth take off only if the economy is productive enough. It also shows that monopoly power can stifle growth, as it lowers wages. Hence, a one-time increase in productivity, or a reduction of monopoly power can push economies from stagnation to industrialization.


Item Type:Report / Paper (Discussion Paper)
Research documents and activity classification:Working Papers > Non-Refereed Working Papers / of national relevance only
Divisions:Department of Business and Management
Additional Information:An other version of the paper is available under subscription in "CEPR Discussion Papers" no. 5429, 2005. http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=5429.
Uncontrolled Keywords:Economic Growth, Industrialization, Technology.
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited By:Maria Teresa Nistico
Deposited On:21 Dec 2010 15:26
Last Modified:21 Dec 2010 15:26

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