A Quasi-Cobb Douglas Production Function with Sectoral Progress: Theory and Application to the New Economy

Abstract

A new approach for analyzing technological progress is presented in the context of a quasi-Cobb-Douglas production function which offers within a simple and consistent equation interesting options for identifying different types of technological progress. In particular the approach suggested allows us to shed new light on the New Economy debate and to indeed focus more adequately on process innovation dynamics - this includes a distinction between Harrod neutrality and Solow neutrality of technological progress.