EconPapers    
Economics at your fingertips  
 

Why Does Technology Advance in Cycles?

Ola Olsson ()

No 38, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Long-run technological progress is cyclical because drastic innovations that introduce new technological opportunity are only profitable at times when repeated incremental innovation has nearly exhausted existing technological opportunity and driven entrepreneurial profit and income growth towards zero. The article presents a ’technological opportunity model’ where endogenous drastic and incremental innovations interact with exogenous discoveries in an idealized metric technology space. New ideas are created by convex combinations of existing ideas. Diminishing technological opportunity results in lower profits and growth, which then makes costly and risky drastic innovations profitable again. This relationship between intense drastic innovation intensity and poor levels of economic growth receives some empirical support.

Keywords: technology; growth; long waves; cycles; techno-logical paradigms; innovations (search for similar items in EconPapers)
JEL-codes: E37 O11 O31 (search for similar items in EconPapers)
Date: 2001-03-21
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://swopec.hhs.se/gunwpe/papers/gunwpe0038.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunwpe:0038

Access Statistics for this paper

More papers in Working Papers in Economics from University of Gothenburg, Department of Economics Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Marie Andersson ().

 
Page updated 2019-06-10
Handle: RePEc:hhs:gunwpe:0038