On institutions and endogenous technological change

Date

1998

Author

Temel, Tuğrul T.
Roe, Terry L.

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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This study investigates the effects of lobbying and institutions on the direction of technological change in a two-sector overlapping generations model. Simulation results suggest that in an environment with unbiased institutions, producers' rent-seeking activities direct the economy towards a labor-augmenting path, that is in contradiction with the capital-augmenting optimal path. On the contrary, rent-seeking activities within a capital-favoring institutional structure lead to a path along which capital is augmented the most. This result suggests that governmental inefficiencies can, partially, be corrected by appropriate institutional arrangements.

URI

https://hdl.handle.net/11511/110080

Collections

Department of Economics, Article