This paper explores the behavioral properties of an Illyrian firm when technical progress occurs. The responses of the firm differ from those of a capitalist firm. If technical progress is Harrod-neutral, then the Illyrian firm keeps capital and output constant but reduces employment. The problem of technological unemployment is thus generated. This problem will be, in fact, a short-run one but not always a long-run one, because, as a result of the technical progress, new cooperatives enter an Illyrian industry and hence an opportunity for employment is created in the industry as a whole.
ASJC Scopus subject areas
- Economics and Econometrics