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Time-to-build obsolescence and the technological paradox

  • Fabrizio Patriarca


    (Department of Economics, Sapienza University of Rome)

The paper focusses on the technological paradox. To analyze the possible temporary negative e ect of an innovation, we make use of a ow representation of production. Our aim is to show that such phenomenon can be justi ed by a simple property of the production process: in real time costs strictly come before proceeds.Moving in the same direction of Amendola (1974), 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 e ect among the different stages of a vertical integrated production system.

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Paper provided by Doctoral School of Economics, Sapienza University of Rome in its series Working Papers with number 6.

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Length: 21 pages
Date of creation: 2010
Date of revision: 2010
Handle: RePEc:dsc:wpaper:6
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  1. 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.
  2. Jeffrey R. Campbell, 1997. "Computational Appendix to Entry, Exit, Embodied Technology, and Business Cycles," Technical Appendices campbell98, Review of Economic Dynamics.
  3. Jeffrey R. Campbell, 1997. "Entry, Exit, Embodied Technology, and Business Cycles," NBER Working Papers 5955, National Bureau of Economic Research, Inc.
  4. 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.
  5. Jovanovic, Boyan & Stolyarov, Dmitriy, 1997. "Optimal Adoption of Complementary Technologies," Working Papers 97-27, C.V. Starr Center for Applied Economics, New York University.
  6. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
  7. 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.
  8. 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.
  9. Hicks, J R, 1970. "A Neo-Austrian Growth Theory," Economic Journal, Royal Economic Society, vol. 80(318), pages 257-81, June.
  10. Hicks, J. R., 1987. "Capital and Time: A Neo-Austrian Theory," OUP Catalogue, Oxford University Press, number 9780198772866.
  11. 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.
  12. Roberto Violi, 1985. "Sentiero di traversa e convergenza," Working Papers 14, Dipartimento Scienze Economiche, Universita' di Bologna.
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