Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Apr, 1962, Volume 30, Issue 2

Investment, Innovation, and Growth

https://www.jstor.org/stable/1910215
p. 239-252

Benton F. Massell

The present paper considers, in a one-sector growth model, the relationship between investment and technical progress--in particular, the impact of the rate of investment on the level of technology. The notion of an optimal capital replacement period is developed and shown to depend on the rates of technical change and of investment. Finally, the model is used to evaluate a method which has previously been used to apportion increases in output per man-hour between investment and improvements in technology.


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