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Time-to-build obsolescence and the technological paradox

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  • Fabrizio Patriarca

    () (Department of Economics, Sapienza University of Rome)

Abstract

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.

Suggested Citation

  • Fabrizio Patriarca, 2010. "Time-to-build obsolescence and the technological paradox," Working Papers 6, Doctoral School of Economics, Sapienza University of Rome, revised 2010.
  • Handle: RePEc:dsc:wpaper:6
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    File URL: http://phdschool-economics.dse.uniroma1.it/website/workingpapers/patriarcaWP6.pdf
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    References listed on IDEAS

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    1. Zamagni, Stefano, 1984. "Ricardo and Hayek Effects in a Fixwage Model of Traverse," Oxford Economic Papers, Oxford University Press, vol. 36(0), pages 135-151, Supplemen.
    2. 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.
    3. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
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    5. Jeffrey Campbell, 1998. "Entry, Exit, Embodied Technology, and Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 371-408, April.
    6. R. Violi, 1985. "Sentiero di traversa e convergenza," Working Papers 14, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. 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.
    8. R. M. Solow & J. Tobin & C. C. von Weizsäcker & M. Yaari, 1966. "Neoclassical Growth with Fixed Factor Proportions," Review of Economic Studies, Oxford University Press, vol. 33(2), pages 79-115.
    9. Dmitriy Stolyarov & Boyan Jovanovic, 2000. "Optimal Adoption of Complementary Technologies," American Economic Review, American Economic Association, vol. 90(1), pages 15-29, March.
    10. Hicks, J R, 1970. "A Neo-Austrian Growth Theory," Economic Journal, Royal Economic Society, vol. 80(318), pages 257-281, June.
    11. 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.
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    Cited by:

    1. 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).
    2. Bianco, Antonio, 2015. "Out of Equilibrium: Bases, Basics, Policies, and Accounts," MPRA Paper 65850, University Library of Munich, Germany.
    3. Fabrizio Patriarca & Claudio Sardoni, 2014. "Growth with Unused Capacity and Endogenous Capital Depreciation," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 646-670, November.
    4. Fabrizio Patriarca & Claudio Sardoni, 2014. "Growth with Unused Capacity and Endogenous Depreciation," Economics Working Paper Archive wp_795, Levy Economics Institute.

    More about this item

    Keywords

    Technological paradox; technology adoption; time-to-build; obsolescence.;

    JEL classification:

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

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