We use annual data on capital's share and relative factor prices from 35 US industries from 1960 to 2005 to test the induced innovation hypothesis. We derive, from a productionfunction framework, testable implications for the effect of contemporaneous and lagged factor price ratios on capital's...

We present an endogenous growth model where innovation are factor saving. Tecnologies can be changed paying a cost so, tecnological change take place only if the benefits are larger than the cost. Since the gains derived from factor saving innovations depend on factor abundance, biased...

The relative stability of aggregate labor share constitutes one of the great macroeconomic ratios. However, relative stability at the aggregate level masks the unbalanced nature of sectoral labor shares. We present a two-sector (manufacturing and services) model with induced innovation that can...