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A model of technological progress in the microprocessor industry

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  • Pillai, Unni
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    Abstract

    This paper develops a model of technological progress in the microprocessor industry that connects the seemingly disparate engineering and economic measures of technological progress. Technological progress in the microprocessor industry is driven by the repeated adoption of higher quality vintages of capital equipment produced by the upstream semiconductor equipment industry. The model characterizes the optimal adoption decision of a microprocessor firm and the resulting rate of technological progress. In conjunction with parameters estimated using a new dataset of the microprocessor industry, the model suggests explanations for the acceleration in technological progress during 1990-2000 and the subsequent slowdown.

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    File URL: http://mpra.ub.uni-muenchen.de/31881/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31881.

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    Date of creation: 27 Jun 2011
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    Handle: RePEc:pra:mprapa:31881

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    Keywords: Technology Adoption; Microprocessors;

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    1. Ariel Pakes & Paul McGuire, 1992. "Computing Markov perfect Nash equilibria: numerical implications of a dynamic differentiated product model," Discussion Paper / Institute for Empirical Macroeconomics 58, Federal Reserve Bank of Minneapolis.
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    3. John Sutton, 2001. "Technology and Market Structure: Theory and History," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262692643, December.
    4. Hulten, Charles R, 1978. "Growth Accounting with Intermediate Inputs," Review of Economic Studies, Wiley Blackwell, vol. 45(3), pages 511-18, October.
    5. Ronald L. Goettler & Brett R. Gordon, 2011. "Does AMD Spur Intel to Innovate More?," Journal of Political Economy, University of Chicago Press, vol. 119(6), pages 1141 - 1200.
    6. Ana Aizcorbe & Stephen D. Oliner & Daniel E. Sichel, 2006. "Shifting trends in semiconductor prices and the pace of technological progress," Finance and Economics Discussion Series 2006-44, Board of Governors of the Federal Reserve System (U.S.).
    7. Gordon, Robert J, 2002. "Technology and Economic Performance in the American Economy," CEPR Discussion Papers 3213, C.E.P.R. Discussion Papers.
    8. Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
    9. Balcer, Yves & Lippman, Steven A., 1984. "Technological expectations and adoption of improved technology," Journal of Economic Theory, Elsevier, vol. 34(2), pages 292-318, December.
    10. Hoppe, Heidrun C, 2002. "The Timing of New Technology Adoption: Theoretical Models and Empirical Evidence," Manchester School, University of Manchester, vol. 70(1), pages 56-76, January.
    11. Farzin, Y.H. & Huisman, K.J.M. & Kort, P.M., 1998. "Optimal timing of technology adoption," Open Access publications from Tilburg University urn:nbn:nl:ui:12-74049, Tilburg University.
    12. William D. Nordhaus, 2001. "The Progress of Computing," Cowles Foundation Discussion Papers 1324, Cowles Foundation for Research in Economics, Yale University.
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