SFB 303 Discussion Paper No. A - 393


Author: Funk, Peter
Title: The Direction of Technological Change
Abstract: This paper presents a stylized model of technological change in a general equilibrium economy. As in Schumpeter's theory of economic development, change is modelled as a sequence of perfectly competitive periods connected via monopolistically competetive transition periods, that determine the direction of change. Under some assumptions it is argued that, although development is almost surely Pareto-inefficient, the long-run direction of change is always efficient.
Keywords: Endogenous Growth, Direction of Change, General Equilibrium, Efficiency, Walras, Schumpeter
JEL-Classification-Number: D50, D60, O12, O30, O33
Creation-Date: January 1993
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