The environmental effect of technical change:A spatial model with city-level data in China

This paper studies the environmental effects of technical change using a spatial model with panel data from 284 prefecture-cities over 2004-2015 in China.We find that the effects of technical change vary across different dimensions of technical change and different pollution indicators.Furthermore,we also provide robust evidence for the existence of the spatial effects of technical change on environmental pollution across cities.First,indigenous technical change displays three patterns of effects on the four pollutants:a positive effect on wastewater,a negative effect on PM_(2.5)concentrations,and an inverted U-shaped relationship with SO_(2)and soot emissions.The spatial effect of indigenous technical change promotes cleaner industrial productions(fewer emissions of SO_(2),soot and wastewater)but higher PM_(2.5)concentrations.Second,technology transfers from foreign direct investment are associated with less pollution except for wastewater,and their spatial effects are unanimously negative on all pollutants.Finally,absorptive capacity can also promote cleaner industrial production,but its spatial effects can do otherwise.Accordingly,the government should take the spatial spillover effects of technical change into account when implementing specific policies,pin down specific pollutants to make full use of the pollution-reducing effects of technical change,and improve the absorptive capacity of domestic firms.

Technical Change,Income Distribution,and Profitability:Marx's Law Revisited

Under the assumption of constant real wage,Okishio’s theorem shows that profit rates do not fall after any viable technical change.Research has indicated that if real wages rise after the introduction of technical change and then profit rates fall,then such fall in profit rates belongs to the realm of profit squeeze theory,which leads to the claim of the impossibility of a consistent theory of declining profit rate based on Marx’s insight.The present study proposes a two-channel framework to distinguish the mechanism of rising organic composition of capital from that of profit squeeze,and show that any viable capital-using and labor-saving technical change would lower the profit rate if the wage/profit ratio is unaffected in a multi-sector setting.

Promoting the Real Economy by the Integration of Digital Technology and the Real Economy:On the Influence to Biased Technical Change

The deep integration of digital technology and the real economy is a vital engine for boosting high-quality growth of the real economy.As a result,it is necessary to investigate the effects of this integration on the real economy.This paper develops a two-sector model that incorporates the production sector and the technology research and development sector,taking into account both the factor attribute and the technical attribute of digital technology.Digital capital,general capital,skilled labor,and unskilled labor are considered as intermediate inputs in the model.Furthermore,this paper examines the effects of two integration modes,i.e.,factor-based integration and technology-based integration,on the development of the real economy and the biased technical change from a theoretical perspective.Empirical tests are conducted to support the analysis.The findings indicate that both factor-based integration and technology-based integration contribute positively to the development of the real economy,although technology-based integration exhibits diminishing marginal effects.Heterogeneity analysis reveals that factor-based integration plays a more significant role in promoting the development of the real economy in regions with geographical advantages,low levels of human resources,high marketization levels,or low market segmentation.On the other hand,technology-based integration assumes a greater role in facilitating the development of the real economy in regions with geographical disadvantages,low costs on human resources,low marketization levels,or high market segmentation.Further analysis demonstrates that the integration of digital technology and the real economy leads to digital capital-biased technical change and skilled labor-biased technical change.Therefore,it is imperative for the public sector to encourage the expansion of both factor-based integration and technology-based integration in the real economy.Additionally,it is also important to develop a reasonable industry layout plan and enhance the skill level of workers to address the rising demand for relevant factors resulting from changes in the biased technical change.

Hog Production in China:Technological Bias and Factor Demand

Technological change and factor biases are estimated by employing a translog cost function based on a new adjusted dataset for China’s hog production sector. Technological change is found not to have been neutral and the factor bias to be statistically significant towards feed grain-saving technology. It is also found that the demand for feed grain is elastic with respect to its own price and that strong substitution relationships exist with respect to some other inputs. Thus, along with technological biases, the changes in input price could affect hog farmer input behaviors and therefore change factor shares of hog production cost in China. In other words, demand for feed grain is very elastic, which results in feed grain-saving technological bias. Two major policy implications can be drawn that rising feed grain prices could significantly reduce the feed grain input on hog farms and developing specialized hog farms could provide more employment opportunities for rural labor in China because feed grain and labor are complementary.

A Nonparametric and Aggregation Theoretic Approach for Measuring Productivity of US Banks during 2006-2016

Existing literature related to efficiency measurement and productivity analysis of banks is swarmed with the input-output classification of banks based on using accounting conventions. This usage varies from paper to paper. No two research papers are in consensus as to which classification should be used. This present work, however, uses the input-output classification of banks based on Barnett’s generalized model of production for financial intermediaries originally proposed in Barnett (1987) [1]. This model is based on economic theory definitions of inputs and outputs of a bank. Using this classification, the paper applies Data Envelopment Analysis to US banks during 2006-2016. This new methodology seeks to resolve and fix the issue of lack of consensus regarding which inputs and outputs to use for productivity analysis of banks. Furthermore, a standardized way of measuring productivity across banks is developed which can be used all over the world. This is accomplished by using the Malmquist Index of Productivity which is a tool used under Data Envelopment Analysis. The paper further establishes the connection of this tool with Barnett’s generalized model of production for financial intermediaries. Results indicate very high efficiency levels for US banks even post financial crisis. The reason for this performance is the cleansing of the financial system as unhealthy banks either left the scene or were merged. Better risk management, cost management and efficiency of structure of funding are some other reasons for high efficiency.

Technical Progress and the Diffusion of Innovations： Classical and Schumpeterian Perspectives1

The paper discusses the diffusion of new technologies from the perspective of the classical economists and Schumpeter. After a comparison of the pre- and post-technical change long-period positions of the economy, we illustrate the process of transition between the two in terms of a two-sector model Next, we turn to a system with joint production. The fact that some products may be ＂bads＂ that need to be disposed of leads to a study of systems of production-cure-disposal. Finally, we investigate the selection pressure innovations exert on incumbent firms. An important message is that technical change cannot generally be studied within a partial framework of the analysis.

Is China up to the Test? A Review of Theories and Priorities for Education Investment for a Modern China

This paper reviews the key theories relating to the role of education in economic development and social change and how education, as a critical component of total factor productivity, contributes to sustained economic growth. It examines how China ＂s education policy reflects the country＇s unique dual economy. Focusing on the post-reform period, the paper contends that while progress has been made, there are risks to China＇s future growth prospects from failing to reap the benefits of sound education policy. It argues that if the Chinese education system is to continue to be a driver of rather than a drain on economic growth, and if China is to successfully manage its transition towards more inclusive, sustainable and equitable growth, reforms will be needed to improve the quality of education at all levels and to create an environment in which China＇s extensive human capital is duly recognized and respected. Crucially, the education system should be transformed to ensure it promotes a comprehensive range of human capabilities, including those that go beyond the part humans play in augmenting production possibilities.