On Institutions and Endogenous Technological Change

15 Pages Posted: 13 Jan 1999

See all articles by Tugrul T. Temel

Tugrul T. Temel

VU University Amsterdam - Center for World Food Studies

Terry L. Roe

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics

Abstract

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, contradicting 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.

JEL Classification: O33, H41, O38

Suggested Citation

Temel, Tugrul T. and Roe, Terry L., On Institutions and Endogenous Technological Change. Available at SSRN: https://ssrn.com/abstract=143268 or http://dx.doi.org/10.2139/ssrn.143268

Tugrul T. Temel (Contact Author)

VU University Amsterdam - Center for World Food Studies ( email )

De Boelelaen 1105
1081 HV Amsterdam, 1081 HV
Netherlands
+3120 444 9310 (Phone)
+3120 444 9325 (Fax)

Terry L. Roe

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics ( email )

1994 Buford Avenue
St. Paul, MN 55108
United States

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