Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171524
Authors: 
Schiess, Daniel
Wehrli, Roger
Year of Publication: 
2008
Series/Report no.: 
Economics Working Paper Series 08/81
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.
Subjects: 
Schumpeterian growth
research and development
general purpose technologies
JEL: 
O11
O33
O41
Document Type: 
Working Paper

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