Technology Life-Cycles and Endogenous Growth

University of Colorado Dept. of Econ. WP No. 00-7

37 Pages Posted: 11 Jan 2001

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Date Written: December 2000

Abstract

I develop a growth model in which R&D resources can be directed either to the discovery of new technologies (inventions) or to the improvement of the quality of machines without altering their underlying technology (innovations). Learning-by-doing is an important determinant of the relative share of resources allocated to inventive versus innovative activity. The dynamics generate endogenous economic growth driven by cycles of technological change where the pattern and timing of technological improvements are consistent with historical evidence. That is (a) inventions and innovations play a complementary role in expanding the technology frontier; (b) when inventions occur they tend to arrive in clusters; and (c) a life-cycle of technologies during the early stages of which a discovery is followed by a period of rapid economic growth and innovation, and the late stages of which dwindling innovations and slower growth set the stage for new discoveries.

JEL Classification: I20, J24, O11, O31, O40

Suggested Citation

Iyigun, Murat F., Technology Life-Cycles and Endogenous Growth (December 2000). University of Colorado Dept. of Econ. WP No. 00-7, Available at SSRN: https://ssrn.com/abstract=250469 or http://dx.doi.org/10.2139/ssrn.250469

Murat F. Iyigun (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-6653 (Phone)
303-492-8622 (Fax)

Harvard University - Center for International Development (CID) ( email )

One Eliot Street Building
79 JFK Street
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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