Standing-on-Shoulder and Fishing-Out Synergies: A Model for Endogenous Long-Waves

Abstract

Standard growth theory considers a constant, endogenously defined rate of technological change that generates a log-linear evolution of economic activity. Yet, the persistent current phase of worldwide slowdown triggers the awakening of "long waves" theories. In the present paper, starting from a dynamically evolving synergy of Romer's "fishing out" and "standing on shoulders" effects, we end up having three mechanisms that provoke a cyclical evolution of applied ideas: a direct impact through applied research's productivity; an effect through researcher's effort allocation; and an effect through the allocation of labour force. Putting these together, we initiate long waves of per capita (p.c.) output.

Technology evolution and long waves: investigating their relation with spectral and cross-spectral analysis

“…in four countries: USA, the largest free-market economy in modern times, and three of the main European technologically leading countries since the industrial revolution, UK, Germany and France. Second, based on theoretical analyses (Mensch, 1975;Olsson, 2000Olsson, , 2001Olsson, , 2005Romer, 1990;Schumpeter, 1939;Zarotiadis & Ozouni, 2017) that stress applied knowledge as a significant driving force, we apply cross-spectral methodology to test its dynamic interrelationship with the economic performance of the above countries.…”