Moore's Law and the Semiconductor Industry: A Vintage Model

Ana Aizcorbe and Samuel Kortum

Scandinavian Journal of Economics, 2005, vol. 107, issue 4, 603-630

Abstract: In this paper we develop a vintage model to gain a better understanding of the semiconductor industry and its role in recent U.S. productivity gains. Unlike previous work, in our model the observed price declines of individual chips are driven by the introduction of better vintages rather than by learning economies. Dominated chips, nonetheless, continue to be produced, for a time, due to sunk investments in chip‐specific production equipment. The model lends partial support to Jorgenson's hypothesis that an exogenous increase in Moore's Law could have generated the more rapid price declines, and faster productivity growth, seen after 1995.

Date: 2005
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https://doi.org/10.1111/j.1467-9442.2005.00429.x

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Working Paper: Moore's Law and the Semiconductor Industry: A Vintage Model (2004)
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