Heterogeneous Researchers in a Two-Sector Representative Consumer Economy
AbstractResearch activities have uncertain outcomes. The question asked in this paper is whether or not this uncertainty can be a central piece on the explanation of long run consumption growth paths. More specifically, we inquire how the existence of different research projects, with different degrees of uncertainty, contribute to unpredictable consumption growth paths. The proposed scenario is a two-sector representative consumer model with researchers that invest in different innovation projects. There is heterogeneity in terms of risk associated to research programs (researchers invest in projects with the same expected outcome but different volatility). This difference in volatility, combined with an adaptive learning – bounded rationality rule, implies an aggregate index of technology and a consumption growth rate that do not present a predictable pattern over time.
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Bibliographic InfoPaper provided by EconWPA in its series GE, Growth, Math methods with number 0409009.
Length: 30 pages
Date of creation: 28 Sep 2004
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Heterogeneous agents; Bounded rationality; Optimal control; Research activities; Volatility and chaos;
Other versions of this item:
- Orlando Gomes, 2006. "Heterogeneous Researchers in a Two-Sector Representative Consumer Economy," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 60(2), pages 113-132, November.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-18 (All new papers)
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