Directed technological change : It's all about knowledge

Abstract

Directed technological change (DTC) hinges on how stocks of factor-augmenting knowledge evolve relative to each other, which depends in turn on the nature of the links between them. We analyse these links in an analytical model focusing explicitly on the relative knowledge stock: in the process we generalize and systematize a number of results from the literature on DTC, and generate some novel results. Finally, we discuss future research directions in the light of existing theory, empirical evidence, and policy problems concerning environment and resources.