Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223425 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8353
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies. We show that the effect of factor-augmenting technical change on relative and absolute factor prices can be decomposed into a productivity effect and a task-demand effect of opposite sign. These effects appear since the novel task-based approach distinguishes between the demands for tasks and the demands for factors. This perspective provides a new intuition for the emergence of relative and absolute factor biases and the role of the elasticity of substitution.
Subjects: 
technical change
factor prices
factor-specific tasks
neoclassical production
JEL: 
O33
O41
Document Type: 
Working Paper
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