Diffusion of General Purpose Technologies

46 Pages Posted: 31 Mar 1997 Last revised: 22 Jun 2012

See all articles by Elhanan Helpman

Elhanan Helpman

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Manuel Trajtenberg

Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: September 1996

Abstract

History and theory alike suggest that General Purpose Technologies (GPT's), such as the steam engine or electricity, may play a key role in economic growth. In a previous paper (Helpman and Trajtenberg, 1994) we incorporated this notion into a Grossman-Helpman growth model, and explored the economy-wide dynamics that a GPT generates. The present paper deals with the diffusion of the GPT over heterogeneous final-good sectors. We show that the gradual adoption of the GPT by each user sector generates a sequence of two-phased cycles, culminating in a bringing about a spell of sustained growth. We also analyze the welfare implications of the order of adoption, by way of numerical simulations. As a diffusion of the transistor (the first embodiment of semiconductors, the dominant GPT of our era), and seek to characterize both the early adopters and the laggards in terms of the parameters of the model.

Suggested Citation

Helpman, Elhanan and Trajtenberg, Manuel, Diffusion of General Purpose Technologies (September 1996). NBER Working Paper No. w5773. Available at SSRN: https://ssrn.com/abstract=3841

Elhanan Helpman

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-4690 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Manuel Trajtenberg (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3640 9911 (Phone)
+972 3640 9908 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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