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A Second-Order Approximation to Technology Choices

  • Orlando Gomes

    (Escola Superior de Comunicação Social)

Resources used in scientific activities are, as any other, scarce. Hence, the economic system has, in every time moment, to choose how to allocate technological inputs. A technology choices model is developed, where scarce scientific resources are alternatively allocated to basic science activities and to applied technology uses. We find that saddle path stability holds for a not too high intertemporal discount rate. The accomplished result is found for a generic quadratic objective function, that is, for a second-order Taylor series approximation of a felicity function regarding technology development goals.

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Paper provided by EconWPA in its series GE, Growth, Math methods with number 0409007.

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Length: 11 pages
Date of creation: 28 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpge:0409007
Note: Type of Document - pdf; pages: 11
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Aghion, Philippe, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Scholarly Articles 3350067, Harvard University Department of Economics.
  2. Charles I. Jones, . "Population and Ideas: A Theory of Endogenous Growth," Working Papers 98014, Stanford University, Department of Economics.
  3. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Wiley Blackwell, vol. 69(4), pages 781-809, October.
  4. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. Philippe Aghion, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Econometrica, Econometric Society, vol. 70(3), pages 855-882, May.
  6. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
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  9. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
  10. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
  11. Adam B. Jaffe & Manuel Trajtenberg, 2005. "Patents, Citations, and Innovations: A Window on the Knowledge Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026260065x, June.
  12. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  13. Orlando Gomes, 2004. "The Optimal Control of Technology Choices," GE, Growth, Math methods 0409008, EconWPA.
  14. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
  15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  16. Stokey, Nancy L, 1995. "R&D and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 62(3), pages 469-89, July.
  17. Alain Alcouffe & Thomas Kuhn, 2004. "Schumpeterian endogenous growth theory and evolutionary economics," Journal of Evolutionary Economics, Springer, vol. 14(2), pages 223-236, 06.
  18. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
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