Implementation Cycles Export

by: Andrei Shleifer

The Journal of Political Economy, Vol. 94, No. 6. (1986), pp. 1163-1190.

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Abstract

The paper describes an artificial economy in which firms in different sectors make inventions at different times but innovate simultaneously to take advantage of high aggregate demand. In turn, high demand results from simultaneous innovation in many sectors. The economy exhibits multiple cyclical equilibria, with entrepreneurs' expectations determining which equilibrium obtains. These equilibria are Pareto ranked, and the most profitable equilibrium need not be the most efficient. While an informed stabilization policy can sometimes raise welfare, if large booms are necessary to cover fixed costs of innovation, stabilization policy can stop all technological progress.

@article{citeulike:949876, abstract = {The paper describes an artificial economy in which firms in different sectors make inventions at different times but innovate simultaneously to take advantage of high aggregate demand. In turn, high demand results from simultaneous innovation in many sectors. The economy exhibits multiple cyclical equilibria, with entrepreneurs' expectations determining which equilibrium obtains. These equilibria are Pareto ranked, and the most profitable equilibrium need not be the most efficient. While an informed stabilization policy can sometimes raise welfare, if large booms are necessary to cover fixed costs of innovation, stabilization policy can stop all technological progress.}, author = {Shleifer, Andrei}, citeulike-article-id = {949876}, citeulike-linkout-0 = {http://www.jstor.org/stable/1833094}, journal = {The Journal of Political Economy}, keywords = {411-1, cycles, implementation, innovation}, number = {6}, pages = {1163--1190}, posted-at = {2006-11-17 07:26:50}, priority = {2}, title = {Implementation Cycles}, url = {http://www.jstor.org/stable/1833094}, volume = {94}, year = {1986} }

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TY - JOUR ID - citeulike:949876 L3 - citeulike-article-id:949876 N2 - The paper describes an artificial economy in which firms in different sectors make inventions at different times but innovate simultaneously to take advantage of high aggregate demand. In turn, high demand results from simultaneous innovation in many sectors. The economy exhibits multiple cyclical equilibria, with entrepreneurs' expectations determining which equilibrium obtains. These equilibria are Pareto ranked, and the most profitable equilibrium need not be the most efficient. While an informed stabilization policy can sometimes raise welfare, if large booms are necessary to cover fixed costs of innovation, stabilization policy can stop all technological progress. IS - 6 JF - The Journal of Political Economy EP - 1190 TI - Implementation Cycles VL - 94 SP - 1163 KW - 411-1 KW - cycles KW - implementation KW - innovation AU - Shleifer, Andrei PY - 1986/// UR - http://www.jstor.org/stable/1833094 ER -

Implementation Cycles Export

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