Models of Technological Progress in Decentralized Economies

Alexander P. Abramov
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Alexander P. Abramov: Russian Academy of Sciences

Chapter Chapter 6 in Balanced and Cyclical Growth in Models of Decentralized Economy, 2014, pp 119-140 from Springer

Abstract: Abstract In this chapter, we consider Leontief-type models of multisector economies that are able to represent technological progress, by means of controlled dynamics for the elements of technological matrices. We present several different ways of describing endogenous technological progress and analyze how it affects the economic indicators of a given system. We formulate optimal control problems related to the deployment of new technologies. We also describe a decision making mechanism related to the investment needed for deploying new technologies. This mechanism is based on the net present values (NPV) of investment projects. We consider a model of radical technological progress, which changes the structure of technological matrices. In a given economic system, this type of progress involves creating a new sector, which produces an innovative commodity. Since such commodity cannot be included in the old structure of the network of technological relationships, the order of the technology matrix grows by one. The new product substitutes the product of one of the “old” sectors.

Keywords: Unit Cost; Technology Change; Technological Progress; Equilibrium Price; Expansion Rate (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-07917-2_6

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DOI: 10.1007/978-3-319-07917-2_6

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