INDUCING TECHNICAL CHANGE: ASIA AND EUROPE.

The Induced Innovation Hypothesis treats relative scarcity of inputs as the major factor determining the direction of technical change in production activities. Technical change is generally induced for the direction of saving scarce inputs and using abundant inputs. However, there are cases in which institutions and policies determine the direction of technical change. This study examined the time-series data from Asian and European agriculture to derive general conclusions regarding the direction of technical change. Institutions and policies were found to be important determinants for the choice of technology besides relative scarcity of input resources. Policy implications were also derived for the future development of Serbian agriculture. [ABSTRACT FROM AUTHOR]