Biased and Unbiased Technological Change
This article provides working definitions of biased and unbiased technological change based on the relative responses of the marginal products of capital and labour that occur in the face of economic shocks. These Hicksian definitions are distinguished from others that focus on how technology augments the production function. The bias and augmentation of technical progress are then linked through the substitutability of labour and capital. Examples of ‘labour-biased’ and ‘capital-biased’ technological change from the 19th century to the present illustrate these ideas.
KeywordsBiased and unbiased technological change CES production function Cobb–Douglas functions Elasticity of substitution Information technology Neutral production functions Skill-bias Technical change
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