IMPACT OF TECHNOLOGICAL PROGRESS ON RELATIVE FACTOR SHARES
Recent technical advance in agriculture. industry, trade and transport has raised the question or its effect on the relative remuneration of the factors or proc.luction, in particular of labour and capital. Technological progress implies the introduction of innovations i.e. new processes, new proc.lucts or more Economical methoc.ls of production. The analysis of relative factor shares requires a detailed examination of the nature of technical progress as well as the underlying production function. In this analysis two basic concepts are involved viz.. the elasticity of substitution and the linear homogeneous production function.
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