Too much of a good thing: endogenous business cycles generated by bounded technological progress

Orlando Gomes

MPRA Paper from University Library of Munich, Germany

Abstract: Following Jones and Williams (2000), we assume that R&D is simultaneously subject to positive and to negative external effects (e.g., the non rival nature of technology conflicts with congestion externalities). This observation allows to conceive an economy where two R&D sectors evolve without departing significantly from each other in terms of their productive results (society tends to penalize imbalances in technical progress, making negative external effects to appear associated to a sector when this outstands relatively to the other sector; the second sector, in turn, will be subject to positive externalities that reflect a catching up effect). The proposed framework, when associated to a growth setup, is able to replicate the existence of endogenous fluctuations and, therefore, it intends to be a contribution to the literature on endogenous business cycles.

Keywords: Technology; Externalities; Endogenous business cycles; Growth models; Nonlinear dynamics and chaos (search for similar items in EconPapers)
JEL-codes: C61 E32 O41 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Too much of a good thing: Endogenous business cycles generated by bounded technological progress (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2845

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