Biased Technical Change and Economic Conservation Laws

Productivity of inputs is an important determinant of the competitiveness of firms in national and international markets. Productivity growth arises from deliberate decisions to innovate but the technological opportunities could be such that different inputs would have different rates of growth. Previous literature has mostly concentrated on labor productivity but empirical studies indicate that productivity of capital is also increasing. One of the objectives of this book is to examine the difference or bias in the productivity growth of the two inputs. §In this book, application of this general approach to study of biased technical change is developed and new empirical results presented for both macroeconomies and microeconomic firms.The principal aim of BIASED TECHNICAL CHANGE AND ECONOMIC CONSERVATION LAWS is twofold: to reveal the new economic significance of the old concept of biased technical change and the current application of the new concept of economic conservation laws.§Although terms such as "labor saving" and "capital saving" fall under the category of biased technical change, the first of these topics, no model exists in which biased technical change gives rise endogenously to technical progress. A special feature of this book is its thorough investigation and analysis of these issues, which go far beyond existing studies in this area.§The concept of economic conservation laws dates back to Ramsey s classic study of 1928. This book primarily makes use of Lie groups to shed new light on the analysis of economic conservation laws. Economic conservation laws are not simply abstract concepts; this book shows that they are tools of empirical analysis that can be applied to such topics as analyses of macro performance and corporate efficiency.