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Time-to-build, obsolescence and the technological paradox

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  • Patriarca, Fabrizio

Abstract

The paper focusses on the technological paradox. To analyze the possible temporary negative effect of an innovation we make use of a flow representation of production. Our aim is to show that such phenomenon can be justified by a simple property of the production process: in real time costs strictly come before proceeds. Moving in the same direction of Amendola (1972), and extending an overlooked result in Belloc (1980), we analyze the obsolescence effect induced by a rise in the interest rate. Furthermore, we analyze the role of capital market stickiness on the timing of the technological paradox and on the distribution of the obsolescence effect among the different stages of a vertical integrated production system.

Suggested Citation

  • Patriarca, Fabrizio, 2012. "Time-to-build, obsolescence and the technological paradox," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 1-10.
    • Handle: RePEc:eee:streco:v:23:y:2012:i:1:p:1-10
    DOI: 10.1016/j.strueco.2011.08.002
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    Cited by:

    1. Bianco, Antonio, 2015. "Out of Equilibrium: Bases, Basics, Policies, and Accounts," MPRA Paper 65850, University Library of Munich, Germany.
    2. Fabrizio Patriarca & Claudio Sardoni, 2014. "Growth with Unused Capacity and Endogenous Capital Depreciation," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 646-670, November.
    3. Mario Amendola & Jean-Luc Gaffard, 2009. "Revisiting the ‘machinery effect’: from Ricardo to Hicks and ahead," Documents de Travail de l'OFCE 2009-13, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. Fabrizio Patriarca & Claudio Sardoni, 2014. "Growth with Unused Capacity and Endogenous Depreciation," Economics Working Paper Archive wp_795, Levy Economics Institute.

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    More about this item

    Keywords

    Technological paradox; Technology adoption; Time-to-build; Obsolescence;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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