Learning Curves and the Cyclical Behavior of Manufacturing Industries
AbstractBuilding on evidence that (a) productivity growth from learning by doing diminishes as experience accumulates with a technology and (b) learning by doing is largely specific to each production technology, this paper models a firm's decision of when to update its technology. The model implies that technology updates endogenously bring large drops in productivity. The model also implies that technology updates are more likely in a boom than in a recession since a high rate of production enables the firm to learn more quickly about the new technology. The forces in this model may help explain some features of plant and industry level data, such as the procyclicality of investment (including plant investment spikes) and the modest correlation between labor input and productivity. (Copyright: Elsevier)
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Bibliographic InfoArticle provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 1 (1998)
Issue (Month): 2 (April)
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Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
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