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Economic Development, variety and employment

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Author Info
Paolo Saviotti () (INRA, Université Pierre Mendés-France and IDEFI, CNRS, Sophia Antipolis,)
Andreas Pyka () (Economics Department, University of Augsburg)

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Abstract

This paper studies qualitative change taking place during economic development. In the model presented qualitative change is created by the mergence of new sectors, each of which produces an output that is different from other sectors. A system with a variable number of sectors is simulated. The model predicts that under given conditions the evolution of a sector tends to follow a life cycle in both the number of firms and in terms of employment. The cyclical behavior is determined by the balance between the increasing intensity of competition, saturating demand and increasing retuns to adoption. In its present form the model is a simplified representation of the economic system, but several improvements can be introduced in order to increase its degree of realism.

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Paper provided by Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp35.

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Date of creation: Sep 2003
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Handle: RePEc:wiw:wiwgee:geewp35

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Keywords: economic development employment multisectoral model

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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.:
  1. Jovanovic, Boyan & MacDonald, Glenn M, 1994. "The Life Cycle of a Competitive Industry," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 322-47, April. [Downloadable!] (restricted)
    Other versions:
  2. Fagerberg, Jan, 2000. "Technological progress, structural change and productivity growth: a comparative study," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 393-411, December. [Downloadable!] (restricted)
    Other versions:
  3. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June. [Downloadable!] (restricted)
  4. Frenken, Koen & Saviotti, Paolo P. & Trommetter, Michel, 1999. "Variety and niche creation in aircraft, helicopters, motorcycles and microcomputers," Research Policy, Elsevier, vol. 28(5), pages 469-488, June. [Downloadable!] (restricted)
  5. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May. [Downloadable!] (restricted)
  6. Fagerberg, Jan & Verspagen, Bart, 1998. "Productivity, R&D Spillovers and Trade," ECIS Working Papers 98.2, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology. [Downloadable!]
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  7. Lancaster, Kelvin, 1975. "Socially Optimal Product Differentiation," American Economic Review, American Economic Association, vol. 65(4), pages 567-85, September. [Downloadable!] (restricted)
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Cited by:
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  1. Antonelli Cristiano, 2006. "Venture capitalism as a mechanism for knowledge governance," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 200604, University of Turin. [Downloadable!]
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