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Long Waves and Short Waves: Growth through Intensive and Extensive Search

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  • Jovanovic, Boyan
  • Rob, Rafael

Abstract

This paper endogenizes the frequency of major discoveries and the extent of their refinement. Four axioms deliver a one-parameter family of beliefs that guide exploratory effort. Such effort trades off the prospect of major new discovery against the chance of successfully refining discoveries made in the past. The only other parameter is the cost of making new discoveries relative to the cost of refining old ones. The paper derives time-series properties of inventive activity as they relate to the two parameters, and it discusses several specific inventions and their subsequent refinement. Copyright 1990 by The Econometric Society.

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  • Jovanovic, Boyan & Rob, Rafael, 1990. "Long Waves and Short Waves: Growth through Intensive and Extensive Search," Econometrica, Econometric Society, vol. 58(6), pages 1391-1409, November.
    • Handle: RePEc:ecm:emetrp:v:58:y:1990:i:6:p:1391-1409
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    1. Boyan Jovanovic & Rafael Rob, 1989. "The Growth and Diffusion of Knowledge," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 569-582.
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