The creative response and the endogenous dynamics of pecuniary knowledge externalities: an agent based simulation model

Cristiano Antonelli and Gianluigi Ferraris
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Gianluigi Ferraris: BRICK, Collegio Carlo Alberto

Journal of Economic Interaction and Coordination, 2018, vol. 13, issue 3, No 5, 599 pages

Abstract: Abstract The paper elaborates an agent based simulation model (ABM) to explore the endogenous long-term dynamics of knowledge externalities. ABMs, as a form of artificial cliometrics, allow the analysis of the effects of the reactivity of firms caught in out-of-equilibrium conditions conditional on the levels of endogenous knowledge externalities stemming from the levels of knowledge connectivity of the system. The simulation results confirm the powerful effects of endogenous knowledge externalities. At the micro-level, the reactions of firms caught in out-of-equilibrium conditions yield successful effects in the form of productivity enhancing innovations, only in the presence of high levels of knowledge connectivity and strong pecuniary knowledge externalities. At the meso-level, the introduction of innovations changes the structural characteristics of the system in terms of knowledge connectivity that affect the availability of knowledge externalities. Endogenous centrifugal and centripetal forces continually reshape the structure of the system and its knowledge connectivity. At the macro system level, an out-of-equilibrium process leads to a step-wise increase in productivity combined with non-linear patterns of output growth characterized by significant oscillations typical of the long waves in Schumpeterian business cycles.

Keywords: Creative reaction; Knowledge connectivity; Emergent property; Endogenous knowledge externalities (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11403-017-0194-3

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