Endogenous growth and structural change through vertical and horizontal innovations

Bondarev, Anton and Greiner, Alfred. (2017) Endogenous growth and structural change through vertical and horizontal innovations. Macroeconomic dynamics. pp. 1-28.

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Official URL: http://edoc.unibas.ch/56526/

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This paper combines horizontal and vertical innovations to generate an endogenous growth model allowing for structural change as an endogenous phenomenon. Older technologies are continuously replaced by newer ones due to creative destruction, and new technologies appear as a result of horizontal innovations and due to the consumers' preference for variety. We assume fixed operational costs for the manufacturing sector and an endogenously defined patent price for every new technology. Every industry is profitable only for a limited period of time, making the effective time of existence of the technology endogenous and finite. We find that in such an economy endogenous structural change is the source of ongoing economic growth. Furthermore, the range of existing sectors as well as growth rates stays constant as long as the technologies are symmetric.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Umweltökonomie (Krysiak)
UniBasel Contributors:Bondarev, Anton A.
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Cambridge University Press
Note:Publication type according to Uni Basel Research Database: Journal article
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Last Modified:26 Jul 2018 15:00
Deposited On:26 Jul 2018 15:00

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