On the Eonomic Purpose of General Purpose Technologies: A Combined Classical and Evolutionary Framework
General purpose technologies (GPTs) are technical breakthroughs that are able to spur growth via their pervasive use in the economy. This paper attempts to study the effects of these innovations for the economic system on an empirical and theoretical level. A structural decomposition analysis for Denmark from 1966 to 2007 tracks the impact of the current GPT, the information and communication technology (ICT), on aggregate and sectoral labor productivity growth. Findings show that the broad diffusion of ICT affected growth significantly after 2000, owing to technical change, substitution and capital deepening, and can be associated with skill-induced wage dispersion. The diffusion process of a GPT is subsequently reconstructed by an evolutionary multisectoral framework: The Sraffian input-output approach is combined with the replicator dynamics approach of evolutionary game theory. Technical unemployment, transitional wage inequality and decelerating economic growth after the appearance of a GPT can thereby be explained.
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