The calm before the storm? - Anticipating the arrival of general purpose technologies
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Date
2008-02Type
- Working Paper
ETH Bibliography
yes
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Abstract
This paper presents a Schumpeterian quality-ladder model incorporating the impact of new General Purpose Technologies (GPTs). GPTs are breakthrough technologies with a wide range of applications, opening up new innovational complementarities. In contrast to most existing models which focus on the events after the arrival of a new GPT, the model developed in this paper focuses on the events before the arrival if R&D firms know the point of time and the technological impact of this drastic innovation. In this framework we can show, that the economy goes through three main phases: First, the economy is in its old steady state. Second, there are transitional dynamics and finally, the economy is in a new steady state with higher growth rates. The transitional dynamics are characterized by oscillating cycles. Shortly before the arrival of a new GPT, there is an increase in R&D activities and growth going even beyond the old steady state levels and immediately before the arrival of the new GPT, there is a large slump in R&D activities using the old GPT. Show more
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https://doi.org/10.3929/ethz-a-005541864Publication status
publishedJournal / series
Economics Working Paper SeriesVolume
Publisher
ETH Zurich, Center of Economic Research (CER-ETH)Subject
Schumpeterian growth; Research and development; General purpose technologiesOrganisational unit
03635 - Bretschger, Lucas (emeritus) / Bretschger, Lucas (emeritus)
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
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ETH Bibliography
yes
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