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Leapfrogging cycles in international competition

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  • Yuichi Furukawa

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Abstract

Technological leadership has shifted at various times from one country to another. We propose a mechanism that explains this perpetual cycle of technological leapfrogging in a two-country model including the dynamic optimization of an infinitely lived consumer. In the model, each country accumulates knowledge stock over time because of domestic innovation and spillovers from foreign innovation. We show that if the international knowledge spillovers are reasonably efficient, technological leadership may shift first from one country to another, and then alternate between countries along an equilibrium path. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Yuichi Furukawa, 2015. "Leapfrogging cycles in international competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 401-433, June.
  • Handle: RePEc:spr:joecth:v:59:y:2015:i:2:p:401-433
    DOI: 10.1007/s00199-014-0850-y
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    Cited by:

    1. Iwaisako, Tatsuro & Tanaka, Hitoshi, 2017. "Product cycles and growth cycles," Journal of International Economics, Elsevier, vol. 105(C), pages 22-40.
    2. repec:spr:joecth:v:65:y:2018:i:2:d:10.1007_s00199-016-1017-9 is not listed on IDEAS
    3. Simone Marsiglio & Marco Tolotti, 2018. "Endogenous growth and technological progress with innovation driven by social interactions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(2), pages 293-328, March.
    4. repec:eee:jmacro:v:53:y:2017:i:c:p:191-206 is not listed on IDEAS
    5. repec:eee:eecrev:v:101:y:2018:i:c:p:297-329 is not listed on IDEAS
    6. Kunihiko Konishi, 2015. "Growth Cycles in a Two-country Model of Innovation," Discussion Papers in Economics and Business 15-07, Osaka University, Graduate School of Economics.
    7. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2019. "Love of Novelty: A Source of Innovation-Based Growth... or Underdevelopment Traps?," MPRA Paper 92915, University Library of Munich, Germany.
    8. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2017. "Receptivity and Innovation," MPRA Paper 81536, University Library of Munich, Germany.

    More about this item

    Keywords

    Perpetual leapfrogging; Innovation cycles; Growth cycles; Endogenous innovation; Knowledge spillovers; E32; F44; O33;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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