nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2008‒07‒05
four papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Schumpeterian Foundations of Real Business Cycles By Nuno Barrau, Galo
  2. Reference Dependence and Market Competition By Zhou, Jidong
  3. Technology and non-technology shocks in a two-sector economy. By Francesco Busato; Alessandro Girardi; Amedeo Argentiero
  4. On the Stability of Research Joint Ventures: Implications for Collusion By Jo Seldeslachts; Tomaso Duso; Enrico Pennings

  1. By: Nuno Barrau, Galo
    Abstract: In this paper I propose a dynamic stochastic general quilibrium model that includes many of Schumpeter’s ideas about growth and business cycles. In this model, technology advances are due to the introduction of vertical innovations by entrepreneurs who are funded by banks. The model is solved and estimated by bayesian methods for the U.S. economy to compute the value of some of its structural parameters. Results show that the presented innovation mechanism is roughly equivalent in terms of volatilies, correlations and impulse responses to the technology shocks in real business cycle models. Notwithstanding, the model differs from traditional RBC models as it incorporates technology catch-up features that affect the convergence to the steady-state.
    JEL: E27 C50 O40
    Date: 2008–06–20
  2. By: Zhou, Jidong
    Abstract: This paper studies the implications of consumer reference dependence in market competition. If consumers take some product (e.g., the first product they have considered) as the reference point in evaluating others and exhibit loss aversion, then the more "prominent" firm whose product is taken as the reference point by more consumers will randomize its price over a high and a low one. All else equal, this firm will on average earn a larger market share and a higher profit than its rival. The welfare impact is that consumer reference dependence could harm firms and benefit consumers by intensifying price competition. Consumer reference dependence will also shape firms' advertising strategies and quality choices. If advertising increases product prominence, ex ante identical firms may differentiate their advertising intensities. If firms vary in their prominence, the less prominent firm might supply a lower-quality product even if improving quality is costless.
    JEL: D11 L13 M37 D43
    Date: 2008–05
  3. By: Francesco Busato (University of Naples Parthenope and University of Aarhus, School of Economics and Managements); Alessandro Girardi (ISAE - Institute for Studies and Economic Analyses and University of Rome Tor Vergata); Amedeo Argentiero (University of Rome Tor Vergata)
    Abstract: This paper presents an empirically testable two-sector dynamic general equilibrium model for the United States economy that admits technology and non-technology shocks. Long-run identification restrictions further distinguish the impact of each shocks over the originating sector (i.e. as a sector-specific shock), and over other sectors different from the originating one (i.e. as a crosssector shock), also exploring the shocks transmission mechanism across sectors. There are three main results. First, business cycles are mainly generated, in each sector, by technology shocks (primarily described by sector-specific shocks), but they are transmitted across sectors along the sectors’ demand side, i.e. passing through non-technology shocks. Second, technology and nontechnology shocks almost equally share the responsibility of fluctuations in the aggregate manufacturing sector. Third, the aggregate dynamics is driven by the relatively larger sector which is the non-durable good one.
    Keywords: Long-run restrictions, sector-specific shocks, cross sector shocks, real business cycle, United States economy.
    JEL: E2 E3 E32
    Date: 2008–04
  4. By: Jo Seldeslachts (Wissenschaftszentrum Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany;; Tomaso Duso (Humboldt University and Wissenschaftszentrum Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany;; Enrico Pennings (Dept. of Applied Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands, E-mail:
    Abstract: Though there is a body of theoretical literature on research joint venture RJV) participation facilitating collusion, empirical tests are rare. Even more so, there are few empirical tests on the general theme of collusion. This note tries to fill this gap by assuming a correspondence between the stability of research joint ventures and collusion. By using data from the US National Cooperation Research Act, we show that large RJVs in concentrated industries are more stable and hence more suspect to collusion.
    Keywords: Research Joint Ventures, Product Market Collusion, Empirical Test
    JEL: L24 L44 L52
    Date: 2008–03

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