DP229 Fixed Investment and the Technology Gap in the UK
|Author(s):||Michael Beenstock, Chris Whitbread|
|Publication Date:||March 1988|
|Keyword(s):||Aggregate Investment, Neo classical Investment, Technology, Trade Unions|
|JEL(s):||423, 522, 621|
|Programme Areas:||Applied Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=229|
United Kingdom investment is explained in terms of the international diffusion of technology, where the United States is assumed to be a technological leader and the United Kingdom a technological laggard. The gap between United Kingdom and United States capital-labor ratios is decomposed into four components: an adjustment gap, an information gap, an appropriate technology gap and a resistance gap. The factors that might influence the gap are hypothesized and it is found that the model gives a reasonable account of business investment since 1960.