Title

The Role of Technological Change

Publication Type

Journal Article

Publication Date

1980

Abstract

We develop an optimal growth model that includes several important new features. First, technological change is endogenously related to the growth of 'knowledge.' Investment may be directed either towards physical capital or knowledge (or both). Knowledge becomes an effective substitute for scarce resources by increasing the technical efficiency of resource utilization both for consumption and in capital. Nevertheless, a finite quantity resource must be embodied in capital and a finite flow is required for depreciation. Thus, there is an upper limit to technical efficiency and economic growth is thus ultimately limited by the availability of renewable resources. For a simple aggregate production function it is shown that technical efficiency never approaches unity on an optimal path.

Discipline

Computer Sciences | Technology and Innovation

Research Areas

Information Systems and Management

Publication

Journal of Environmental Economics and Management

Volume

7

Issue

4

First Page

353

Last Page

371

ISSN

0095-0696

Identifier

10.1016/0095-0696(80)90027-3

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/0095-0696(80)90027-3