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The dynamic effects of general purpose technologies on Schumpeterian growth

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Book cover Entrepreneurships, the New Economy and Public Policy

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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.

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Author information

Authors and Affiliations

  1. Department of Economics and Finance, University of Scranton, 413 Brennan Hall, Scranton, PA, 18510, USA

    Iordanis Petsas

Authors
  1. Iordanis Petsas
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Editor information

Editors and Affiliations

  1. Faculty of Economics and Business Administration Chair for Microeconomics, Friedrich-Schiller-University of Jena, Carl-Zeiss-Str. 3, 07743, Jena, Germany

    Uwe Cantner

  2. Department of Economics, University of Florida, Gainesville, FL, 32611, USA

    Elias Dinopoulos

  3. Graduate School of Business, University of Florida, 201 Bryan Hall, Gainesville, FL, 32611-7150, USA

    Robert F. Lanzillotti

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© 2005 Springer-Verlag Berlin Heidelberg

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Petsas, I. (2005). The dynamic effects of general purpose technologies on Schumpeterian growth. In: Cantner, U., Dinopoulos, E., Lanzillotti, R.F. (eds) Entrepreneurships, the New Economy and Public Policy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-26994-0_17

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