Table Of Content

154 ^=^<0, (C.26) daR A ^ ^<0, = (C.27) dp A -™^>0, (C.28) Tddacngor=-—DAT7R^, <0> (C-29) — dco =—-D,pR,>0. (C.30) da^ A Thesignsofequations(C.23)through(C.30)proveProposition2. C.2.3 Proposition3 Usingthesystemofequationsgivenby(C.21),Iestablishthecomparativesteady- stateresultsforthePEGspecificationregarding .1calculatethedeterminantofthe matrixformedbyreplacingthesecondcolumnofthematrixoftheendogenousvariables in(C.21)withthecorrespondingcolumnvectoroftheexogenousvariablein consideration.Thus,Iobtainthefollowingresults: de *<* (C.31) dNr de "¥>* (C.32) dN" de_¥>* dk~ (C.33) de (C.34) daR A ESSAYSONENDOGENOUSTECHNOLOGICALPROGRESS By IORDANISPETSAS ADISSERTATIONPRESENTEDTOTHEGRADUATESCHOOL OFTHEUNIVERSITYOFFLORIDAINPARTIALFULFILLMENT OFTHEREQUIREMENTSFORTHEDEGREEOF DOCTOROFPHILOSOPHY UNIVERSITYOFFLORIDA 2002 Copyright2002 by IordanisPetsas dsiliuls,pspseohrrtetaatTIilhowwinaso.yudsIliddssesudenpiroptctoaathrtitaeoevntdehiimssstedwaeroditrniekdcaanmttoeyedxhtsettrrouadwomiireytdshi.mnaoaDltrulhyrmeiwryna,gylSomtvaayenv.drgoreuanldacu.oauWtreiatgshteoudduitmeseh,etrwohlifoilvneeissahenrmdiyously ACKNOWLEDGMENTS Mybiggestheartfeltthanksgotomymother,Stavroula,whoprovidedmewith continuousencouragement.Tomydeepestsorrow,mymotherpassedawaywhileIwas workingonthisdissertation.1amextremelysorrythatshecannothavethechancetosee myachievement. Inwritingthisdissertation,Ihavebenefitedfromtheguidance,encouragement, andknowledgeofmanypeopleandIofferthemmythanks.Iwouldliketothankmy parentsStavroulaandNikosPetsasandtherestofmyfamily,PanagiotisandMaria,for supportingmystudyingabroadandpatientlywaitingduringthelongspellsofseparation. IamdeeplyindebtedandgratefultoEliasDinopoulosforhisguidanceand encouragementateverystageofthedissertation.Eliashascontributedimmenselytomy developmentasanindividual,teacher,andresearcher.Iamverygratefulfortherolethat hehasplayedsowellasmygreatmotivatorandadvisor.IalsowishtorecognizeDavid Figlio,DouglasWaldo,andStevenSlutskyfortheirhelpfulcommentsandadvice.Their keeneyesfordetailandtheirastutecommentsalwayscameattherighttime. IwouldalsoliketothankPanosHatzipanayotou,myformerundergraduate teacherandadvisorattheAristotleUniversityofThessaloniki,whomademerealizethe excitementofmacroeconomics.Heassuredmethatitistrulyworthwhiletopursuea Ph.D.ineconomics.1amalsogratefultoManolisLoukakis,GeorgePapachristou,Nikos Varsakelis,andChrisoulaZacharopouloufortheirdedicatedteaching. MylifeinGainesvillewouldhavebeenmiserablehadInothadwonderful friends.IgreatlyacknowledgethefriendshipofHuseyinYildirimandHsiu-ChuanYeh.I alsothankSofiaVidalisforhersupportandforsharingmypathdespiteherown challengesasaPh.D.student.Thisdissertationisdedicatedtomymother,whohasbeen thebestteacherofmylife. v TABLEOFCONTENTS page ACKNOWLEDGMENTS iv ABSTRACT x CHAPTER 1INTRODUCTION 1 111...132PGSuresontceaerisanslevdPeurCrsopumospsaPerrTaoetdciuhcvnteoIlAnodngvoiavenasttaiagonnedaaSnncddhuFRmieplreamttieSvriezieaWnaGgreoswth 361 2PROCESSVERSUSPRODUCTINNOVATIONINMULTIPRODUCTFIRMS 9 2.1Introduction 9 2.2AModelofProcessversusProductInnovation 13 2.2.1 DemandforDifferentiatedProducts 13 2.32M.o2d.e2lTohfePrDoudoupcotlvyerMsoudsePlrocessInnovationConsideringtheR&DCosts 1195 2.4ImplicationsandExtensions 24 3TSHCEHUDMYPNEATMEIRCIAEFNFGERCTOSWOTFHGENERALPURPOSETECHNOLOGIESON 30 3.1Introduction 30 3.2TheModel 39 3.2.1IndustryStructure 39 3.2.2DiffusionofaNewGPT 40 3.2.3Households 42 33..22..54PRr&odDucRtacMeasrkets 4454 3.2.6LaborMarket 49 3.3Long-RunEquilibrium 49 3.4TransitionalDynamics 54 3.4.1StockMarketBehavior 57 3.4.2AggregateInvestment 61 3.5ConcludingRemarks 62 4SUSTAINEDCOMPARATIVEADVANTAGEINAMODELOF SCHUMPETERIANGROWTHWITHOUTSCALEEFFECTS 70 4.1Introduction 70 4.2TheModel 78 4.2.1HouseholdBehavior 79 44..22..32PRr&odDucRtacMeasrkets 8813 4.2.4LaborMarkets 89 4.3Steady-StateEquilibriumUnderthePEGSpecification 90 4.4ComparativeSteady-StateAnalysisUnderthePEGSpecification 94 4.5Steady-StateEquilibriumUndertheTEGSpecification 99 4.6ComparativeSteady-StateAnalysisUndertheTEGSpecification 102 4.7Conclusions 106 5CONCLUSION 122 APPENDDC APROOFSOFPROPOSITIONSINCHAPTER2 127 BSUMMARYOFTHEHISTORICALEVOLUTIONOFSEMICONDUCTOR TECHNOLOGYANDPROOFSOFPROPOSITIONSINCHAPTER3 134 CPROOFSOFPROPOSITIONSINCHAPTER4 149 REFERENCES 164 BIOGRAPHICALSKETCH 169 1 LISTOFFIGURES Figure 2-1 MRar&gDinCaolstPrsofaistsSufnrkomProcessandProductInnovationConsidering 26 2-2 NetMarginalProfitsfromProcessandfromProductInnovations 27 2-3 EffectofanIncreaseinR&DCostfromProductInnovationonn*^ 28 2-4 EffectofanIncreaseinR&DCostfromProcessInnovationonn*t 29 3-1 Steady-StateEquilibria 64 3-2 StabilityoftheBalanced-GrowthEquilibrium 65 3-3 TimePathofthePerCapitaConsumptionExpenditureAfteraGPTArrives intheEconomy 66 3-4 TimePathoftheMarketInterestRateAfteraGPTArrivesintheEconomy 66 3-5 EvolutionoftheAggregateInvestmentDuringtheDiffusionPath 67 3-6 EffectsofaGPTontheSchumpeterianGrowthRate 68 3-7 EffectsofaGPTontheStockMarket 69 4-1 Steady-StateEquilibriumUnderthePEGSpecification 11 4-2 RUanndkeirngthoefPtEheGGSlpoebcailfiRca&tiDonInvestment,I,BetweenHomeandForeign, 112 4-3 EffectsofanIncreaseintheForeignCounty'sRelativeSizeorinthe PopulationGrowthRate(UnderthePEGSpecification) 113 4-4 EUfnfietctRs&ofDanLaIbnocrreRaesqeuiinrtehmeenRt&oDriDniftfhiecuClotnysPuamrearm'esteSru,bjk,ecitnitvhee DiscountRate(UnderthePEGSpecification) 114 4-5 EffectsofanIncreaseintheForeign'sUnitLaborRequirementin Manufacturing(UnderthePEGSpecification) 115 4-6 EffectsofanIncreaseinHome'sUnitLaborRequirementin Manufacturing(UnderthePEGSpecification) 116 4-7 Steady-StateEquilibriumUndertheTEGSpecification 117 4-8 ECfofnecstusmeorf'asnSIunbcjreecatsievienDtihsecFoournetiRgantCeoourntiyn'tsheReRla&tDiveDiSfifziecuilntythe GrowthParameter(UndertheTEGSpecification) 118 4-9 EffectsofanIncreaseintheSizeofInnovationsorinthePopulation GrowthRate(UndertheTEGSpecification) 119 4-10EffectsofanIncreaseinForeign'sUnitLaborRequirementinManufacturing (UndertheTEGSpecification) 120 4-11(EUffnedcetrstohfeaTnEIGncrSepaesceifiincaHtoimone)'sUnitLaborRequirementinManufacturing 121