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Infrastructure and General Purpose Technologies: A Technology Flow Framework

Listed author(s):
  • Christiaan Hogendorn

    ()

    (Economics Department, Wesleyan University)

  • Brett Frischmann

    (Cardozo Law School)

Economic growth models often refer to “general purpose technology” (GPT) and “infrastructure” as key to improving productivity. Some GPTs, like railroads and the Internet, fit common notions of infrastructure, while other likes the steam engine and the computer do not. Without a specific model of the special characteristics of infrastructures, important technology policy questions relating to openness are not addressed. Infrastructure is similar to other GPTs in its demand-side characteristics that enable a wide variety of productive activities (or uses) and generate substantial spillovers to the rest of the economy. On the supply side, infrastructure is quite different from the other GPTs. It is partially nonrival as opposed to fully nonrival, which may complicate appropriation problems and raise congestion issues. It has strong cost-side economies of scale giving less scope for using markets to provide and control it. And it exhibits tethering, meaning that different users must be physically or virtually connected for the infrastructure to function. We present a technology flow framework that clarifies these issues and provides a base for policy analysis and for defining empirical research questions.

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File URL: http://repec.wesleyan.edu/pdf/chogendorn/2017001_hogendorn.pdf
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Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2017-001.

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Length: 23 pages
Date of creation: Jan 2017
Handle: RePEc:wes:weswpa:2017-001
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  1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
  2. Bauer, Johannes M., 2014. "Platforms, systems competition, and innovation: Reassessing the foundations of communications policy," Telecommunications Policy, Elsevier, vol. 38(8), pages 662-673.
  3. Aghion, Philippe & David, Paul A. & Foray, Dominique, 2009. "Science, technology and innovation for economic growth: Linking policy research and practice in 'STIG Systems'," Research Policy, Elsevier, vol. 38(4), pages 681-693, May.
  4. Liao, Hailin & Wang, Bin & Li, Baibing & Weyman-Jones, Tom, 2016. "ICT as a general-purpose technology: The productivity of ICT in the United States revisited," Information Economics and Policy, Elsevier, vol. 36(C), pages 10-25.
  5. Schuett, Florian, 2012. "Field-of-use restrictions in licensing agreements," International Journal of Industrial Organization, Elsevier, vol. 30(5), pages 403-416.
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  7. Lipsey, Richard G. & Carlaw, Kenneth I. & Bekar, Clifford T., 2005. "Economic Transformations: General Purpose Technologies and Long-Term Economic Growth," OUP Catalogue, Oxford University Press, number 9780199290895, April.
  8. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
  9. Hogendorn Christiaan, 2005. "Regulating Vertical Integration in Broadband: Open Access versus Common Carriage," Review of Network Economics, De Gruyter, vol. 4(1), pages 1-14, March.
  10. Maryann P. Feldman & Ji Woong Yoon, 2012. "An empirical test for general purpose technology: an examination of the Cohen--Boyer rDNA technology," Industrial and Corporate Change, Oxford University Press, vol. 21(2), pages 249-275, April.
  11. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-361, May.
  12. S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 133-150, Spring.
  13. Brett M. Frischmann & Christiaan Hogendorn, 2015. "Retrospectives: The Marginal Cost Controversy," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 193-206, Winter.
  14. Venturini, Francesco, 2015. "The modern drivers of productivity," Research Policy, Elsevier, vol. 44(2), pages 357-369.
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