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Time-to-build, obsolescence and the technological paradox

  • Patriarca, Fabrizio

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.

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File URL: http://www.sciencedirect.com/science/article/pii/S0954349X11000555
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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 1-10

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Handle: RePEc:eee:streco:v:23:y:2012:i:1:p:1-10
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/525148

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  1. Mehmet Yorukoglu, 1998. "The Information Technology Productivity Paradox," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 551-592, April.
  2. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804, March.
  3. Nardini, Franco, 1990. "Cycle-trend dynamics in a fixwage neo-Austrian model of traverse," Structural Change and Economic Dynamics, Elsevier, vol. 1(1), pages 165-194, June.
  4. Hicks, J. R., 1987. "Capital and Time: A Neo-Austrian Theory," OUP Catalogue, Oxford University Press, number 9780198772866, March.
  5. Jeffrey R. Campbell, 1997. "Computational Appendix to Entry, Exit, Embodied Technology, and Business Cycles," Technical Appendices campbell98, Review of Economic Dynamics.
  6. Jovanovic, Boyan & Stolyarov, Dmitriy, 1997. "Optimal Adoption of Complementary Technologies," Working Papers 97-27, C.V. Starr Center for Applied Economics, New York University.
  7. Jeffrey R. Campbell, 1997. "Entry, Exit, Embodied Technology, and Business Cycles," NBER Working Papers 5955, National Bureau of Economic Research, Inc.
  8. Nardini, Franco, 1993. "Traverse and convergence in the neo-Austrian model: The case of a distributive shock," Structural Change and Economic Dynamics, Elsevier, vol. 4(1), pages 105-125, June.
  9. Zamagni, Stefano, 1984. "Ricardo and Hayek Effects in a Fixwage Model of Traverse," Oxford Economic Papers, Oxford University Press, vol. 36(0), pages 135-51, Supplemen.
  10. Roberto Violi, 1985. "Sentiero di traversa e convergenza," Working Papers 14, Dipartimento Scienze Economiche, Universita' di Bologna.
  11. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
  12. Hicks, J R, 1970. "A Neo-Austrian Growth Theory," Economic Journal, Royal Economic Society, vol. 80(318), pages 257-81, June.
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