Accession Number : AD0434450


Title :   TECHNICAL PROGRESS IN TWO-SECTOR MODELS,


Corporate Author : RAND CORP SANTA MONICA CALIF


Personal Author(s) : Taylor,Vincent D


Report Date : Apr 1964


Pagination or Media Count : 155


Abstract : This memorandum is a theoretical exposition of models useful in the study of the role of technical progress in an economy. The models have a capital goods sector and a consumer goods sector, each of which employs both labor and capital. Production in each sector is governed by a CobbDouglas function, which implies constant returns to scale. Only exponential growth paths (where all variables are changing at constant exponential rates) are treated analytically. The memo randum compares shared technical progress, the benefits of which are shared equally by machines of all ages, and embodied technical progress, which consists of technical advances tha must be incorporated in new machines before production can be affected. Technical progress is assumed to proceed at constant exponential rates, and these rates are allowed to differ between sectors. Solutions are derived for a model economy where (1) persons (in the aggregate) desire to save a fraction of gross income that is a function only of the rate of interest, (2) uncertainty is absent, and (3) the lifetimes of machines are economically determined. Exponential solutions are obtained for the cases of pure shared and pure embodied technical progress, and the equilibrium relationships among technical progress and the economic variables are investigated. (Author)


Descriptors :   *MANAGEMENT ENGINEERING , MATHEMATICAL MODELS , ECONOMICS , PRODUCTION , MONEY , LABOR


Distribution Statement : APPROVED FOR PUBLIC RELEASE