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Dissemination of Technology in Market and Planned Economies

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Author Info
Maurizio Iacopetta (Georgia Institute of Technology)

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Abstract

The Soviet Union was competing head to head with market economies in the generation of new technologies, not only in traditional industries such as steelmaking, electricity, and machineries, but also in high tech-areas such as synthetic materials and microelectronics. Yet its productivity performance was significantly worse than that of both developing and industrial countries. R&D-based growth models cannot explain this fact, as the Soviet effort in research and education was comparable to that of most advanced countries. I claim that a technology adoption model helps us understand better the Soviet experience. I hypothesize that the Soviet managerial compensation system generated an incentive for the manager to perform only a modest retooling activity out of fear of breaking the production norm that the planner imposed upon the firm.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Macroeconomics.

Volume (Year): 4 (2004)
Issue (Month): 1 ()
Pages: 1141-1141
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Handle: RePEc:bep:maccon:v:4:y:2004:i:1:p:1141-1141

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Related research
Keywords: retooling output target productivity

Find related papers by JEL classification:
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

References listed on IDEAS
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  2. Martin L. Weitzman, 1980. "The "Ratchet Principle" and Performance Incentives," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 302-308, Spring. [Downloadable!] (restricted)
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  3. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-41, June. [Downloadable!] (restricted)
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  4. Martin L. Weitzman, 1976. "The New Soviet Incentive Model," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 251-257, Spring. [Downloadable!] (restricted)
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  5. Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-53, September. [Downloadable!] (restricted)
  6. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-68, June. [Downloadable!] (restricted)
  7. Parente Stephen L., 1994. "Technology Adoption, Learning-by-Doing, and Economic Growth," Journal of Economic Theory, Elsevier, vol. 63(2), pages 346-369, August. [Downloadable!] (restricted)
  8. Fan, Liang-Shing, 1975. "On the Reward System," American Economic Review, American Economic Association, vol. 65(1), pages 226-29, March. [Downloadable!] (restricted)
  9. Goldfeld, Stephen M. & Quandt, Richard E., 1990. "Output targets, the soft budget constraint and the firm under central planning," Journal of Economic Behavior & Organization, Elsevier, vol. 14(2), pages 205-222, October. [Downloadable!] (restricted)
  10. Easterly, William & Fischer, Stanley, 1995. "The Soviet Economic Decline," World Bank Economic Review, Oxford University Press, vol. 9(3), pages 341-71, September.
  11. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  12. Charles I. Jones, 2002. "Sources of U.S. Economic Growth in a World of Ideas," American Economic Review, American Economic Association, vol. 92(1), pages 220-239, March. [Downloadable!] (restricted)
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  13. Rosenberg, Nathan, 1976. "On Technological Expectations," Economic Journal, Royal Economic Society, vol. 86(343), pages 523-35, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Saso Polanec, 2004. "Convergence at last? Evidence from Transition Countries," LICOS Discussion Papers 14404, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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