Three essays on technological innovation and economic growth

Abstract

Technological innovation is treated as an explanatory variable of long term economic growth in several different approaches. Whether by economists of neoclassical trend or not, the theme is always recurrent. However, the attempt to find a suitable microfoundation for the understanding of the transmission channels of technological change as a driver of economic growth is still a challenge. Although there is a consensus that investment in innovation through new products and processes increase the product of the individual firm, and hence its rate of profit, not all firms innovate. Thus, the proposed research aims to understand why not all firms innovate, or innovate at very different rates. For a better understanding of this fact, an analysis of technical change based on issues addressed by the Complexity Approach, such as behavioral heterogeneity of economic actors and creative process, beyond the reductionist approach of traditional models, will be made. We also intend to develop a model based on the assumptions of the Kalecki-Steindl tradition, concerning the heterogeneity of firms in relation to the strategy of investing or not in new production technologies. An evolutionary dynamics is introduced, formalized by means of an evolutionary game in which the fraction of firms that adopt innovation (no innovation) strategy increases (decreases) within the population of firms according to the deviation of the payoff of each strategy in relation to the average payoff. The strategy that achieves the highest payoff will spread more quickly, gaining relative participation in the population of firms. Over time, the micro-diversity of behaviors of individual firms and the macrodynamics of the output growth and income distribution co-evolve. The distribution of the strategies influences macroeconomic dynamics, which, in turn, influences the decision making process of firms. Thus, we will seek to understand how behavioral heterogeneity of firms in relation to investments in new technologies affects economic growth and income distribution (wages and profits). Finally, we intend to confront the formal theoretical model with real world data, or yet with artificial data generated by computer simulation. It is hoped that this study contributes to the literature on Economic Development, with regard to the understanding of the role of technical change. (AU)