DIFFUSION OF TECHNOLOGY - A NEOCLASSICAL VIEW

Abstract

We discuss the diffusion of technology from the point of view neoclassical economics. In the long run, the adoption of technology depends only on the rate of return of the new technology compared with the old one. A distinction is made between the speed of diffusion and the number of farmers that adopt the new technology. The number of farmers that have adopted the new technology depends only on the rate of return of the new technology compared with the old ones. The speed of adoption is function of the rate of return and of the variables introduced by the diffusion models. The choice of technology depends, in general, on relative prices. There are, however, technologies that support a huge variation of prices.