Localized technological change demand pull and productivity growth. A microeconomic model with adjustment costs

Abstract

The notions of switching costs and learning are powerful tools that make it possible to close a number of gaps and inconsistencies between microeconomic approaches and more aggregate analyses of economic growth. Here we want to show how these notions makes it possible to elaborate reliable micro-foundations of the well known Kaldorian hypothesis on the positive relationship between productivity growth and output growth and of the demand pull hypothesis of the determinants of the rate of introduction of technological innovation.