Journal of Evolutionary Economics

, Volume 13, Issue 5, pp 577–605 | Cite as

The dynamic effects of general purpose technologies on Schumpeterian growth

Abstract.

General purpose technologies (GPTs) are drastic innovations characterized by pervasiveness in use and innovational complementarities. The dynamic effects of a GPT are analyzed within a quality-ladders model of scale-invariant Schumpeterian growth. The diffusion path of a GPT across a continuum of industries is governed by S-curve dynamics. The model generates a unique, saddle-path long-run equilibrium. Along the transition path, the measure of industries that adopt the new GPT increases, consumption per capita falls, and the interest rate rises. The growth rate of the stock market depends negatively on the rate of GPT diffusion and the magnitude of the GPT-ridden R&D productivity gains; and positively on the rate of population growth. It also follows a U-shaped path during the diffusion process of the new GPT. Finally, the model generates transitional growth cycles of per capita GNP.

Keywords:

General purpose technologies Schumpeterian growth Scale effects R&D races 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2003

Authors and Affiliations

  1. 1.Department of Economics and FinanceUniversity of ScrantonScrantonUSA

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