Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92647
Authors: 
Horii, Ryo
Year of Publication: 
2001
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 560
Abstract: 
When a continuum of technologies is introduced to the model of Grossman and Helpman (1991), both continuous and discrete technological progress may occur as a result of technology choices by private firms. A good is created through R&D based on one of a continuum of technologies that differ in productivity, and the R&D cost is smaller when there is greater public knowledge about that technology, which accumulates through spillovers. When firms shift continuously to superior technologies, there is no incentive to retain existing technologies and the economy grows smoothly. By contrast, when many firms choose the same technology, accumulated knowledge makes this choice privately optimal for a certain time period, and the economy grows cyclically through a sequence of discrete progresses in technology. These two dynamics constitute multiple equilibria, and it depends on the size of the parameters which equilibrium is desirable for consumers.
Subjects: 
endogenous growth
growth cycles
technology choice
R&D spillovers
continuous and discrete technological progress
general purpose technologies
JEL: 
E32
O33
O41
Document Type: 
Working Paper

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