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Article Type

Research Article

Abstract

The paper makes use of the generalized least squares method to examine the effects of technological progress and productivity on economic growth in Uganda during the 1970 to 2020 period. Data employed in conducting empirical analyses were collected from the United Nations data bank. The paper is based on the neoclassical growth model and Cobb–Douglas production function with decreasing returns to scale because production often takes place within the feasible region of production. Therefore, we focus on the range of diminishing (but non–negative) productivity of the factors of production. We also examine the effects of some determinants of technology (e.g., output, innovation, capital, labor, capital productivity, labor productivity, household consumption, investment spending, government spending, exports and imports) on technological progress in Uganda during the given period. The paper is important because previous research works tended to focus more on production with constant returns to scale and increasing returns to scale of factors of production, but less on decreasing returns to scale of factors of production. Yet the production function with increasing returns to scale of factors of production operates, outside the feasible region of production. We find that the increase in the growth of technology, capital, labor and innovation could have boosted the economic growth, while, the increase in capital productivity and labor productivity could have had negative consequences on economic growth in Uganda, during the given period.

Keywords

Technological Progress, Innovation, Economic Growth, Generalized Least Squares Method, Aggregate Profits

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