Advanced Search
MyIDEAS: Login to save this paper or follow this series

Why Does Technology Advance in Cycles?

Contents:

Author Info

  • Olsson, Ola

    ()
    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

Long-run technological progress is cyclical because drastic innovations that introduce new technological opportunity are only profitable at times when repeated incremental innovation has nearly exhausted existing technological opportunity and driven entrepreneurial profit and income growth towards zero. The article presents a ’technological opportunity model’ where endogenous drastic and incremental innovations interact with exogenous discoveries in an idealized metric technology space. New ideas are created by convex combinations of existing ideas. Diminishing technological opportunity results in lower profits and growth, which then makes costly and risky drastic innovations profitable again. This relationship between intense drastic innovation intensity and poor levels of economic growth receives some empirical support.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://swopec.hhs.se/gunwpe/papers/gunwpe0038.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 38.

as in new window
Length: 33 pages
Date of creation: 21 Mar 2001
Date of revision:
Handle: RePEc:hhs:gunwpe:0038

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC

Related research

Keywords: technology; growth; long waves; cycles; techno-logical paradigms; innovations;

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Michele Boldrin & David K. Levine, 2000. "Growth cycles and market crashes," Staff Report, Federal Reserve Bank of Minneapolis 279, Federal Reserve Bank of Minneapolis.
  2. Timothy F. Bresnahan & Manuel Trajtenberg, 1992. "General Purpose Technologies "Engines of Growth?"," NBER Working Papers 4148, National Bureau of Economic Research, Inc.
  3. Peretto, Pietro F., 1997. "Technological Change, Market Rivalry, and the Evolution of theCapitalist Engine of Growth," Working Papers, Duke University, Department of Economics 97-06, Duke University, Department of Economics.
  4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(5), pages S71-102, October.
  5. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(5), pages 893-921, October.
  6. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
  7. Elhanan Helpman & Manuel Trajtenberg, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," NBER Working Papers 4854, National Bureau of Economic Research, Inc.
  8. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  9. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Working Papers 4370, National Bureau of Economic Research, Inc.
  10. Jovanovic, Boyan & Rob, Rafael, 1987. "Long Waves and Short Waves: Growth Through Intensive and Extensive Search," Working Papers, C.V. Starr Center for Applied Economics, New York University 87-35, C.V. Starr Center for Applied Economics, New York University.
  11. Martin L. Weitzman, 1995. "Recombinant Growth," Harvard Institute of Economic Research Working Papers 1722, Harvard - Institute of Economic Research.
  12. Robert W. Fogel, 1999. "Catching Up with the Economy," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 1-21, March.
  13. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 78-102, March.
  14. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-71, September.
  15. Robert J. Gordon, 2000. "Does the "New Economy" Measure up to the Great Inventions of the Past?," NBER Working Papers 7833, National Bureau of Economic Research, Inc.
  16. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, American Economic Association, vol. 76(5), pages 984-1001, December.
  17. Olsson, Ola, 2000. " Knowledge as a Set in Idea Space: An Epistemological View on Growth," Journal of Economic Growth, Springer, Springer, vol. 5(3), pages 253-75, September.
  18. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, American Economic Association, vol. 80(2), pages 355-61, May.
  19. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, Econometric Society, vol. 50(6), pages 1345-70, November.
  20. Kauffman, Stuart & Lobo, Jose & Macready, William G., 2000. "Optimal search on a technology landscape," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 43(2), pages 141-166, October.
  21. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, Econometric Society, vol. 65(6), pages 1389-1420, November.
  22. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(4), pages 759-84, August.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Zon,Adriaan,van & Fortune,Emmanuelle & Kronenberg,Tobias, 2003. "How to Sow and Reap as You Go: a Simple Model of Cyclical Endogenous Growth," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 029, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  2. I. Hakan Yetkiner & Albert de Vaal & Adriaan van Zon, 2003. "The Cyclical Advancement of Drastic Technologies," Working Papers, Research unit Sustainability and Global Change, Hamburg University FNU-21, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
  3. Zon,Adriaan,van & Kronenberg,Tobias, 2005. "General Purpose Technologies and Energy Policy," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 011, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  4. Lundström, Susanna, 2003. "Technological Opportunities and Growth in the Natural Resource Sector," Working Papers in Economics, University of Gothenburg, Department of Economics 116, University of Gothenburg, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0038. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Andersson).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.