Essays on the theory of production and technical progress.

TLDR: Sheshinski and Solow as discussed by the authors consider a production model in which machines embody the technology of their date of construction and obsolescence takes its toll when rising wages absorb the revenues from a particular machine.

Abstract: Title: Essays on the Theory of Production and Technical Progress Author: Eytan Sheshinski In the first chapter we consider a production model in which machines embody the technology of their date of construction and obsolescence takes its toll when rising wages absorb the revenues from a particular machine. The length of life of machines is a variable that is determined by equilibrium conditions. Chapter II analyses a model in which the freedom to choose techniques with varying capital-labor ratios exists only before a machine is constructed but not later (ex-ante but not ex-post). Chapter III provides a generalization of the former: there may be some scope for variation in labor requirements ex-post, but not as much as ex-ante. In all these chapters we discuss conditions of short-run equilibrium and we prove that, under certain conditions, any equilibrium solution converges asymptotically to a unique balanced growth path in which the vintage distribution of capital remains stationary. In Chapter IV we consider a multi-sectoral model in which a number of discrete activities are available to each sector. The analysis concentrates on the recently-revived question of whether it is possible to order the techniques that are chosen at each rate of interest, such that their choice is a monotonic function of the rate of interest. It is shown that in general no such order exists, although conditions that ensure its existence can be formulated. Chapter V is a comparison of the characteristics of socially optimum and competitive paths of capital accumulation in an aggregative model in which technical progress is viewed as a process of learning by doing. We adopt Arrow' s hypothesis that learning by doing is measured by cumulated gross investments. The implications of the hypothesis for prices and equilibrium conditions in the two-sector case are briefly dis cus s ed. Chapter VI presents an empirical research on the significance of the learning by doing hypothesis. While in most cases the "learning coefficients" prove to be positive, their significance and, in particular, their interpretation as technical progress (and not, say, conventional economies of scale) is ambiguous. Thesis supervisor: Robert M. Solow Title: Professor of Economics Department of Economics and Social Science ii