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The Cyclical Advancement of Drastic Technologies

  • I. Hakan Yetkiner
  • Albert de Vaal
  • Adriaan van Zon

Drastic technological changes are cyclical because basic R&D is carried on only at times when entrepreneurial profits for incremental technologies of the prevailing technological paradigm fall close to zero. The model is essentially an endogenous technological change framework. Varieties, input to the final good production, are composite goods. Each composite good is produced by a set of intermediaries, outgrowths of basic R&D and applied R&D. The basic intermediate, product of basic R&D, is modeled as in Romer (1990). Complementary intermediates, the outgrowths of applied R&D, do show the property of falling profits. The falling character of profits implies that basic R&D becomes more yielding than applied R&D at certain points in time. Research people switch back and forth between the applied and basic research sectors, creating (endogenous) cycles in the advancement of drastic technologies and economic activity.

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Paper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-21.

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Length: 32 pages
Date of creation: Apr 2003
Date of revision: Apr 2003
Handle: RePEc:sgc:wpaper:21
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  1. Richard S.J. Tol & Thomas E. Downing & Samuel Fankhauser & Richard G. Richels & Joel B. Smith, 2001. "Progress In Estimating The Marginal Costs Of Greenhouse Gas Emissions," Working Papers FNU-4, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2001.
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  11. Katrin Rehdanz, 2002. "Hedonic Pricing Of Climate Change Impacts To Households In Great Britain," Working Papers FNU-13, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2002.
  12. Richard S.J. Tol & Roda Verheyen, 2001. "Liability And Compensation For Climate Change Damages – A Legal And Economic Assessment," Working Papers FNU-9, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2001.
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  14. Katrin Rehdanz & Richard S.J. Tol, 2002. "On National and International Trade in Greenhouse Gas Emission Permits," Working Papers FNU-11, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2003.
  15. Claudia Kemfert & Wietze Lise & Richard S.J. Tol, 2001. "Games Of Climate Change With International Trade," Working Papers FNU-7, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2001.
  16. Richard S.J. Tol & Wietze Lise & Benoit Morel & Bob C.C. van der Zwaan, 2001. "Technology Development And Diffusion And Incentives To Abate Greenhouse Gas Emissions," Working Papers FNU-6, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2001.
  17. Schneider, Uwe A. & McCarl, Bruce A., 2005. "Implications of a Carbon-Based Energy Tax for U.S. Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), October.
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