Two Technological Revolutions

Boyan Jovanovic () and Peter Rousseau

Journal of the European Economic Association, 2003, vol. 1, issue 2-3, 419-428

Abstract: The IPOs of the Electricity/Internal Combustion revolution created more lasting value than the IPOs of the IT revolution. Stock-market data point to two explanations for this. First, computer prices have been falling much faster than did those of electricity and internal combustion in the 1890-1930 period, and so the value of each generation of computer-intensive entrants is reduced by later entrants. And, second, the pre-1973 vintages reacted to the microcomputer relatively quickly, perhaps because the threat of being taken over is now higher than it was 70-100 years ago. (JEL: O3, N2) Copyright (c) 2003 The European Economic Association.

Date: 2003
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