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Path Dependence, Endogenous Innovation, and Growth *
Author(s) -
Redding Stephen
Publication year - 2002
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.t01-1-00054
Subject(s) - imitation , technological change , endogenous growth theory , path (computing) , pace , economics , path dependent , path dependence , neoclassical economics , economic geography , economic system , industrial organization , microeconomics , mathematical economics , macroeconomics , market economy , human capital , computer science , geography , psychology , social psychology , programming language , geodesy
The article presents a model of endogenous innovation and growth, in which technological change is path dependent. The historical pattern of technological development plays a central role in determining the pace of future technological change. Path dependence is explained using a distinction between fundamental and secondary knowledge. The economy moves endogenously between periods of drastic and nondrastic innovation. Technological lock‐in is shown to be a special case of path dependence. The model provides a rationale for cycles in technological leadership. This rationale exists in equilibria with positive levels of fundamental research and in a world with no imitation.