Directed technological change, factor adjustment, and GDP: Two decompositions with OECD evidence

Economics Letters 2026 Open access

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Authors: Christophe Feder, Cristiano Antonelli
DOI: 10.1016/j.econlet.2026.112857
Cited by: 3
References: 16

Abstract

We propose a growth-accounting approach based on a time-varying Constant Elasticity of Substitution (CES) production function that decomposes the total technological effect on GDP into neutral and non-neutral components, separating pure productivity from effects induced by factor-quantity adjustments. Applied to a balanced panel of 32 OECD countries (1994–2019), the method shows that most of the technological impact on GDP arises from non-neutral components operating mainly through adjustments in factor composition and quantities, while the direct productivity contribution is often weak or negative.

Fields of Study & Subjects

Economic Growth and Productivity Monetary Policy and Economic Impact Global trade and economics

Publication details

Journal / source
Economics Letters
Publisher
Elsevier BV
Volume
261
Pages
112857–112857
Publication date
4 February 2026
Language
EN