SFB 303 Discussion Paper No. B - 22

Author: Krelle, Wilhelm
Title: Long-Term Fluctuations of Technical Progress and Growths
Abstract: In this paper we show that, after a rise in the fifties and early sixties, there was a substantial decline of the rate of technical progress and of the average rates of growth during the last 15 years in the most important developed countries in East and West. We demonstrate that the savings ratio and the rate of transfer from invention to innovations followed the same pattern. We explain this movement by a latent variable called entrepreneurship witch measures the degree of economic activity in the population. We estimate the time series of this latent variable for several countries and show that they follow a sinusoidal pattern. The cyclical movement of "entrepreneurship" induces similar fluctuations in the rate of technical progress and in the savings ratio which in turn are responsible for the long term fluctuations of the growth path.
The cyclical fluctuations of "entrepreneurship" may be explained by the transfer of information and valuation from person to person within a society.
Creation-Date: May 1986
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