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Growth Cycles with Technology Shifts and Externalities

Author

Listed:
  • Eriksson, Clas

    (University College of Gävle-Sandviken)

  • Lindh, Thomas

    () (Department of Economics)

Abstract

This paper investigates a model with technological cycles induced by shifts in technologies. The key feature is that technological development occurs partly by discrete replacement of obsolete technologies, partly by continuous innovation of components for a pervasive general purpose technology. The technological system is explicitly modeled as a complex interrelation between distinct constituents. By allowing for positive technological externalities, closed form analytical solutions for different phases can be obtained, the timing of technology shifts endogenized and a simple characterization of stationary cycles is achieved. This contributes to realism and analytical tractability. The model is capable of reproducing features of e.g. the shift to computer technology.

Suggested Citation

  • Eriksson, Clas & Lindh, Thomas, 1997. "Growth Cycles with Technology Shifts and Externalities," Working Paper Series 1997:15, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:1997_015
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    References listed on IDEAS

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    1. Miles S. Kimball & John G. Fernald & Susanto Basu, 2006. "Are Technology Improvements Contractionary?," American Economic Review, American Economic Association, vol. 96(5), pages 1418-1448, December.
    2. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    3. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
    4. Helpman, Elhanan & Rangel, Antonio, 1999. "Adjusting to a New Technology: Experience and Training," Journal of Economic Growth, Springer, vol. 4(4), pages 359-383, December.
    5. Nahuis, R., 1998. "The Dynamics of a General Purpose Technology in a Research and Assimilation Model," Discussion Paper 1998-119, Tilburg University, Center for Economic Research.
    6. Shleifer, Andrei, 1986. "Implementation Cycles," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1163-1190, December.
    7. Avinash Dixit & James Mirrlees & Nicholas Stern, 1975. "Optimum Saving with Economies of Scale," Review of Economic Studies, Oxford University Press, vol. 42(3), pages 303-325.
    8. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
    9. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    10. Judd, Kenneth L, 1985. "On the Performance of Patents," Econometrica, Econometric Society, vol. 53(3), pages 567-585, May.
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    Citations

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    Cited by:

    1. Daniel Schiess & Roger Wehrli, 2011. "Long-Term Growth Driven by a Sequence of General Purpose Technologies," CER-ETH Economics working paper series 11/148, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    2. Дементьев В.Е., 2013. "Структурные Факторы Технологического Развития," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 49(4), pages 33-46, октябрь.
    3. Daniel Schiess & Roger Wehrli, 2008. "The Calm Before the Storm? - Anticipating the Arrival of General Purpose Technologies," CER-ETH Economics working paper series 08/81, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    4. Schaefer, Andreas & Schiess, Daniel & Wehrli, Roger, 2014. "Long-term growth driven by a sequence of general purpose technologies," Economic Modelling, Elsevier, vol. 37(C), pages 23-31.
    5. Gomes, Orlando, 2015. "Optimal resource allocation in a representative investor economy," Economic Modelling, Elsevier, vol. 50(C), pages 72-84.
    6. Tsutomu Harada, 2010. "The division of labor in innovation between general purpose technology and special purpose technology," Journal of Evolutionary Economics, Springer, vol. 20(5), pages 741-764, October.

    More about this item

    Keywords

    Economic growth; cycles; general purpose technologies;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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