Working Paper Series,
Uppsala University, Department of Economics

Abstract: This paper investigates a model with technological cycles induced by shifts in technologies. The key feature is that technological development occurs partly by discrete replacement of obsolete technologies, partly by continuous innovation of components for a pervasive general purpose technology. The technological system is explicitly modeled as a complex interrelation between distinct constituents. By allowing for positive technological externalities, closed form analytical solutions for different phases can be obtained, the timing of technology shifts endogenized and a simple characterization of stationary cycles is achieved. This contributes to realism and analytical tractability. The model is capable of reproducing features of e.g. the shift to computer technology.

Keywords: Economic growth; cycles; general purpose technologies

JEL-codes: O41

29 pages, June 28, 1997

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Published as

Clas Eriksson and Thomas Lindh, (2000), 'Growth Cycles with Technology Shifts and Externalities', Economic Modelling, vol 17, no 1, pages 139-170

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