IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/19008.html
   My bibliography  Save this paper

Two-dimensional Constrained Chaos and Time in Innovation: An analysis of industrial revolution cycles

Author

Listed:
  • YANO Makoto
  • FURUKAWA Yuichi

Abstract

Many issues in cycles and fluctuations cannot be explained without multiple state variables. Time needed for innovation is one such issue. This study uncovers, and provides a new characterization for, ergodic chaos with two state variables and builds a model of innovation highlighting time in innovation and intellectual property protection. We demonstrate that the explosive industrial takeoffs and Kondratieff's long waves over the past two centuries and a half may be explained as a single equilibrium phenomenon. Time in innovation tends to stabilize chaotic innovation dynamics. Intellectual property protection is a necessary condition for chaotic takeoffs from the no-innovation phase.

Suggested Citation

  • YANO Makoto & FURUKAWA Yuichi, 2019. "Two-dimensional Constrained Chaos and Time in Innovation: An analysis of industrial revolution cycles," Discussion papers 19008, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:19008
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/19e008.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tapan Mitra & Gerhard Sorger, 1999. "Rationalizing Policy Functions by Dynamic Optimization," Econometrica, Econometric Society, vol. 67(2), pages 375-392, March.
    2. Baierla, Gary & Nishimura, Kazuo & Yano, Makoto, 1998. "The role of capital depreciation in multi-sectoral models," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 467-479, January.
    3. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    4. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    5. Boldrin,Michele & Levine,David K., 2010. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521127264.
    6. Kazuo Nishimura & Makoto Yano, 2012. "On the Least Upper Bound of Discount Factors that are Compatible with Optimal Period-Three Cycles," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 165-191, Springer.
    7. Krishnendu Ghosh Dastidar, 2017. "Oligopoly, Auctions and Market Quality," Economics, Law, and Institutions in Asia Pacific, Springer, number 978-4-431-55396-0, June.
    8. FURUKAWA Yuichi & Tat-kei LAI & SATO Kenji, 2018. "Novelty-Seeking Traits and Innovation," Discussion papers 18073, Research Institute of Economy, Trade and Industry (RIETI).
    9. Kazuo Nishimura & Makoto Yano, 2012. "Non-linear Dynamics and Chaos in Optimal Growth: An Example," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 127-150, Springer.
    10. Akiyama, Taro & Furukawa, Yuichi & Yano, Makoto, 2011. "Private defense of intellectural properties and economic growth," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 1(3), pages 355-364.
    11. Charles I. Jones & Paul M. Romer, 2010. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 224-245, January.
    12. Joel Mokyr, 2009. "Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth," American Economic Review, American Economic Association, vol. 99(2), pages 349-355, May.
    13. Jess Benhabib & Kazuo Nishimura, 2012. "The Hopf Bifurcation and Existence and Stability of Closed Orbits in Multisector Models of Optimal Economic Growth," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 51-73, Springer.
    14. Yuichi Furukawa & Makoto Yano, 2014. "Market quality and market infrastructure in the South and technology diffusion," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(1), pages 139-146, March.
    15. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, December.
    16. Bhattacharya,Rabi & Majumdar,Mukul, 2007. "Random Dynamical Systems," Cambridge Books, Cambridge University Press, number 9780521825658.
    17. Nishimura, Kazuo & Yano, Makoto, 1994. "Optimal Chaos, Nonlinearity and Feasibility Conditions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(5), pages 689-704, August.
    18. Mitra, Tapan, 1996. "An Exact Discount Factor Restriction for Period-Three Cycles in Dynamic Optimization Models," Journal of Economic Theory, Elsevier, vol. 69(2), pages 281-305, May.
    19. Jess Benhabib & Kazuo Nishimura, 2012. "Competitive Equilibrium Cycles," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 75-96, Springer.
    20. Nishimura, Kazuo & Sorger, Gerhard & Yano, Makoto, 1994. "Ergodic Chaos in Optimal Growth Models with Low Discount Rates," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(5), pages 705-717, August.
    21. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    22. Makoto Yano, 1998. "On the Dual Stability of a von Neumann Facet and the Inefficacy of Temporary Fiscal Policy," Econometrica, Econometric Society, vol. 66(2), pages 427-452, March.
    23. Bhattacharya,Rabi & Majumdar,Mukul, 2007. "Random Dynamical Systems," Cambridge Books, Cambridge University Press, number 9780521532723.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Makoto Yano & Chris Dai & Kenichi Masuda & Yoshio Kishimoto, 2020. "Creation of Blockchain and a New Ecosystem," Economics, Law, and Institutions in Asia Pacific, in: Makoto Yano & Chris Dai & Kenichi Masuda & Yoshio Kishimoto (ed.), Blockchain and Crypto Currency, chapter 0, pages 1-19, Springer.
    2. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mitra, Tapan & Nishimura, Kazuo, 2001. "Discounting and Long-Run Behavior: Global Bifurcation Analysis of a Family of Dynamical Systems," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 256-293, January.
    2. Kazuo Nishimura & Alain Venditti & Makoto Yano, 2014. "Destabilization effect of international trade in a perfect foresight dynamic general equilibrium model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(2), pages 357-392, February.
    3. John Stachurski, 2009. "Economic Dynamics: Theory and Computation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012774, December.
    4. Guerrero-Luchtenberg, C.L., 2000. "A uniform neighborhood turnpike theorem and applications," Journal of Mathematical Economics, Elsevier, vol. 34(3), pages 329-357, November.
    5. Goenka, Aditya & Poulsen, Odile, 2004. "Factor Intensity Reversal and Ergodic Chaos," Working Papers 04-13, University of Aarhus, Aarhus School of Business, Department of Economics.
    6. Ghiglino, Christian & Venditti, Alain, 2007. "Wealth inequality, preference heterogeneity and macroeconomic volatility in two-sector economies," Journal of Economic Theory, Elsevier, vol. 135(1), pages 414-441, July.
    7. Bosi, Stefano & Magris, Francesco & Venditti, Alain, 2005. "Competitive equilibrium cycles with endogenous labor," Journal of Mathematical Economics, Elsevier, vol. 41(3), pages 325-349, April.
    8. Orlando Gomes, 2006. "Local Bifurcations and Global Dynamics in a Solow-type Endogenous Business Cycles Model," Annals of Economics and Finance, Society for AEF, vol. 7(1), pages 91-127, May.
    9. Deng, Liuchun & Khan, M. Ali & Mitra, Tapan, 2022. "Continuous unimodal maps in economic dynamics: On easily verifiable conditions for topological chaos," Journal of Economic Theory, Elsevier, vol. 201(C).
    10. Makoto Yano & Yuichi Furukawa, 2021. "Two-Dimensional Constrained Chaos and Industrial Revolution Cycles with Mathemetical Appendices," KIER Working Papers 1057, Kyoto University, Institute of Economic Research.
    11. Ali Khan, M. & Piazza, Adriana, 2011. "Optimal cyclicity and chaos in the 2-sector RSS model: An anything-goes construction," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 397-417.
    12. Sorger, Gerhard, 2004. "Consistent planning under quasi-geometric discounting," Journal of Economic Theory, Elsevier, vol. 118(1), pages 118-129, September.
    13. Dawid, Herbert & Kopel, Michael, 1997. "On the Economically Optimal Exploitation of a Renewable Resource: The Case of a Convex Environment and a Convex Return Function," Journal of Economic Theory, Elsevier, vol. 76(2), pages 272-297, October.
    14. Angeletos, George-Marios & Calvet, Laurent-Emmanuel, 2005. "Incomplete-market dynamics in a neoclassical production economy," Journal of Mathematical Economics, Elsevier, vol. 41(4-5), pages 407-438, August.
    15. Gelb, Alan & Meyer, Christian J. & Ramachandran, Vijaya, 2014. "Development as diffusion: Manufacturing productivity and sub-Saharan Africa's missing middle," WIDER Working Paper Series 042, World Institute for Development Economic Research (UNU-WIDER).
    16. Akhmet, Marat & Akhmetova, Zhanar & Fen, Mehmet Onur, 2014. "Chaos in economic models with exogenous shocks," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 95-108.
    17. Gomułka Stanisław, 2017. "The Global Economy in the 21st Century: Will the Trends of the 20th Century Continue?," Central European Economic Journal, Sciendo, vol. 2(49), pages 62-72, December.
    18. Alexeeva, Tatyana A. & Kuznetsov, Nikolay V. & Mokaev, Timur N., 2021. "Study of irregular dynamics in an economic model: attractor localization and Lyapunov exponents," Chaos, Solitons & Fractals, Elsevier, vol. 152(C).
    19. Jean-Paul Chavas, 2004. "On Impatience, Economic Growth and the Environmental Kuznets Curve: A Dynamic Analysis of Resource Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(2), pages 123-152, June.
    20. Becker, Robert A. & Tsyganov, Eugene N., 2002. "Ramsey Equilibrium in a Two-Sector Model with Heterogeneous Households," Journal of Economic Theory, Elsevier, vol. 105(1), pages 188-225, July.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:19008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.