Summary
A nonlinear growth model is presented that introduces technical innovations within a Harrodian growth framework. We first introduce product innovation into a standard Harrodian model. This resolves the knife-edge problem, whereas irregular growth cycles could occur with excess capacity. We then introduce process innovation. Bifurcation analysis shows that the model permits different structurally stable dynamics when the parameters go through some critical levels. Such a structural change in dynamics reflects an essential feature of endogenous technical change in the long run: the evolution from process innovation to product innovation.
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Gong, G. (2007). Endogenous Technical Change: The Evolution from Process Innovation to Product Innovation. In: Asada, T., Ishikawa, T. (eds) Time and Space in Economics. Springer, Tokyo. https://doi.org/10.1007/978-4-431-45978-1_3
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DOI: https://doi.org/10.1007/978-4-431-45978-1_3
Publisher Name: Springer, Tokyo
Print ISBN: 978-4-431-45977-4
Online ISBN: 978-4-431-45978-1
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