Economic Models of Technological Change: Theory and Application

Economic Models of Technological Change: Theory and Application

Economic Models of Technological Change: Theory and Application

Economic Models of Technological Change: Theory and Application


Scholars, students, policy makers and business practitioners will find the theoretical and empirical models provided by this book helpful in understanding the economics of technical change at both the micro and macro levels. The major focus is on the question of how economic models can be used to study firms' behavior in the innovation process. The book also stresses strategies that policy makers can use to bolster technical change, technology diffusion, and economic growth.


The importance of technological change cannot be overemphasized. It is beneficial to all three economic agents: consumers, producers and the government. Consumers benefit from new and improved products; producers are able to lower production costs with process innovation and capture whole markets with new products; and governments are able to relax resource constraints and promote economic growth through technical change.

This book covers the main area in the economics of technological change. While significant research has been done in the area, especially in the last two decades, there is no single text that covers both theoretical and empirical topics in substantial detail. In this book, theoretical and empirical models of technical change are presented covering various areas.

The book is divided into seven chapters. Each chapter begins with an introduction that includes a brief review of the literature and a discussion of key issues in that sub-area. The literature reviews are not intended to be comprehensive but to update the reader regarding the topics being covered. This is followed by detailed economic models on important topics. In this manner, the reader not only becomes familiar with the general issues in an area but also obtains a detailed insight into one or two issues covered in the models. This healthy mix of depth and breadth is missing from the texts currently available. The idea is to communicate the trade-offs between generality and specific results. After going through the book the reader should be familiar with the current state of economic research and unresolved questions in the area.

The scope of topics covered is quite broad. The main focus of the discussion on innovation is on micro-level interaction among innovating firms. Specifically, the effects of changes in rivalry, degree of research spillovers and the patent length on a firm's research investment are examined. Under the structure-

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