By G. Antonelli
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Additional info for Economics of Structural and Technological Change
Such homogeneity can be found at different levels. Two relevant ones concern the development of a specific single technology or the development of a series of connected technologies, examples being the Silicon Valley and the Italian industrial districts, respectively. Of great importance is the connection of these local, technological, production and innovation systems with the human resources and skills endogenously developed and the creation of local open labour markets. Intellect co-operates in the creation of economic values by means of a continuous transformation of context-specific knowledge in general codified knowledge, which is then conveyed in other specific economic contexts.
As Hansen points out, when for instance an increase in autonomous investment occurs, income will increase by a magnified amount according to the multiplier. ‘This increase in income may, however, induce a further increase in investment’ (Hansen, 1951, p. 173, original emphasis). The principle can be also explained in terms of ‘derived demand’ (Hansen, 1951, p. 179). The most important scholar concerned with technological change, in the Keynesian tradition, is Nicholas Kaldor. He has anticipated with Schumpeter many of the key ideas in the study of endogenous forces driving economic growth (Kaldor, 1954).
Moreover, in the early phase of the traverse, processes using the old technique coexist with the one using the new. The economic life of these processes, however, is shortened. e. e. unemployment, cannot be excluded. If a full employment path must be followed, a fall in the real wage rate is necessary, but this fall can be overcome in the long run. A third case, that can lead to induced inventions, can be found in a situation in which the economy is following a full employment path with restricted supply of labour.