Proceedings of the 28th International Academic Conference, Tel Aviv

TECHNOLOGICAL PROGRESS, LABOUR PRODUCTIVITY AND ECONOMIC GROWTH: DISENTANGLING THE NEGATIVE AND POSITIVE EFFECTS

MERTER MERT

Abstract:

This study simply claims that technological progress has positive and negative effects on the labour productivity, so, on the economic growth. Technological progress may have a negative effect on economic growth because of skills obsolescence of labour. For this reason, if the nature of technological progress is assumed as Harrod-neutral for the steady-state analysis, then, the net effect of the technological progress on the economic growth can be examined. Using Hicks-neutrality, it cannot be possible to investigate positive and negative effects. The present study offers a simple calculation procedure in order to disentangle the positive and negative effects. Finally, the study tries to introduce capital-deepening-induced technological progress, if the growth rate and contribution of technological progress is found negative while there is positive economic growth and the steady state conditions are hold at the final state.

Keywords: Economic growth, technological progress, skills obsolescence.

DOI: 10.20472/IAC.2017.028.012

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