ICT-Investment, Knowledge Accumulation and Endogenous Growth

In this paper we present an endogenous growth model based on Lucas (1988). We have extended the Lucas model by incorporating ICT-capital next to human capital. We take account of spillovers from ICT use in human capital formation to final output production. The effects on growth of these spillovers depend very much on whether they are external or completely internalised. We find that welfare is positively affected, the stronger these spillovers are, but also the more these spillovers are internalised. In addition, we find that in the case of limited internalised knowledge spillovers, we may face a multiple equilibria steady state growth situation, that has an inherent tendency to select the non-optimum (high growth) equilibrium in which all types of capital are ‘over accumulated’, including ICT-capital. This suggests that there is room for policy intervention here, because there exists an ‘optimum’ value of the knowledge-spillover parameter where both equilibria coincide and over accumulation does not happen.economics of technology ;

Endogenous Technical Change and Skill Biases in Employment Opportunities

In this paper we present a model that addresses the issue of the uneven distribution ofemployment opportunities over low- and high-skilled workers in a context of skill-biasedendogenous technical change. In our model, technical change consists in part of productinnovation. There is also process innovation to the extent that new products can be producedin two different ways, either using high-skilled workers, or using low-skilled workers afteradapting the production process of a new product. The model combines elements fromKrugman’s (1979) North-South framework, Vernon’s (1966) life-cycle hypothesis andAghion and Howitt’s (1992) work on creative destruction. We show that from a growth pointof view, lowering the relative wages for low-skilled workers does indeed reduceunemployment in the short run, as expected, but it also lowers growth. This is reminiscent ofKleinknecht’s (1998) contention that moderate wage growth makes for slow technical change.economics of technology ;

Front propagation techniques to calculate the largest Lyapunov exponent of dilute hard disk gases

A kinetic approach is adopted to describe the exponential growth of a small deviation of the initial phase space point, measured by the largest Lyapunov exponent, for a dilute system of hard disks, both in equilibrium and in a uniform shear flow. We derive a generalized Boltzmann equation for an extended one-particle distribution that includes deviations from the reference phase space point. The equation is valid for very low densities n, and requires an unusual expansion in powers of 1/|ln n|. It reproduces and extends results from the earlier, more heuristic clock model and may be interpreted as describing a front propagating into an unstable state. The asymptotic speed of propagation of the front is proportional to the largest Lyapunov exponent of the system. Its value may be found by applying the standard front speed selection mechanism for pulled fronts to the case at hand. For the equilibrium case, an explicit expression for the largest Lyapunov exponent is given and for sheared systems we give explicit expressions that may be evaluated numerically to obtain the shear rate dependence of the largest Lyapunov exponent.Comment: 26 pages REVTeX, 1 eps figure. Added remarks, a reference and corrected some typo

Short-time fluctuations of displacements and work

A recent theorem giving the initial behavior of very short-time fluctuations of particle displacements in classical many-body systems is discussed. It has applications to equilibrium and non-equilibrium systems, one of which is a series expansion of the distribution of work fluctuations around a Gaussian function. To determine the time-scale at which this series expansion is valid, we present preliminary numerical results for a Lennard-Jones fluid. These results suggest that the series expansion converges up to time scales on the order of a picosecond, below which a simple Gaussian function for the distribution of the displacements can be used.Comment: 10 pages, 3 figure

A Simple Endogenous Growth Model With Asymmetric Employment Opportunities by Skill

In this paper we present the outlines of an endogenous growth model that focuses on the labour market- and skill-aspects of economic policy measures that may have an impact on technological change, and hence on the long term effectiveness of the policy measures concerned. The link between skills and technology is two-fold. On the one hand, new technology is high-skilled intensive, while on the other hand, process R&D may actively change the skill-mix of existing production technologies in the direction of a more intensive use of least-cost production factors/skills. Hence, we endogenise both product R&D and process R&D decisions. The product R&D generates new varieties of goods with a higher quality than older varieties. New and older varieties are assumed to be imperfect substitutes, so that new varieties only gradually replace older varieties. Process R&D in turn is geared towards downscaling the skill-requirements of the jobs associated with producing the different varieties of output. Because high-skilled labour has different uses (it is an input to final output production, but also into product and process R&D activities), whereas low-skilled labour is used only in final output generation, we can show how various alternative policy measures may affect R&D decisions, hence growth performance, but also the distribution of income between skills. We also show that the promotion of process R&D in particular has beneficial effects both for the employment perspectives of low-skilled workers and for growth in general. In simulation experiments with the model we show that the model, even in its present state, is able to mimic the stylised facts reported by Acemoglu (1997), who observed for the US that an increase in the supply of high-skilled labour does not necessarily imply a fall in the relative wage rate of high-skilled workers in the long run. We show that the ensuing increase in R&D activity creates its own demand for high-skilled workers when new products arrive on the market that are high-skilled intensive during the first phase of their life-cycle, as we assume it to be the case. This in turn invokes endogenous process R&D reactions that change the long term composition of the demand for labour by skill and by sector. In various experiments we found that the model generates an interesting interplay between both types of R&D that may have important consequences for the distribution of income between skills, for growth and more generally for the design of economic policy.economics of technology ;

Non-equilibrium Thermodynamics and Fluctuations

In the last ten years, a number of ``Conventional Fluctuation Theorems'' have been derived for systems with deterministic or stochastic dynamics, in a transient or in a non-equilibrium stationary state. These theorems gave explicit expressions for the ratio of the probability to find the system with a certain value of entropy (or heat) production to that of finding the opposite value. A similar theorem for the fluctuations of the work done on a system has recently been demonstrated experimentally for a simple system in a transient state, consisting of a Brownian particle in water, confined by a moving harmonic potential. In this paper we show that because of the interaction between the stochastic motion of the particle in water and its deterministic motion in the potential, very different new heat theorems are found than in the conventional case. One of the consequences of these new heat Fluctuation Theorems is that the ratio of the probability for the Brownian particle to absorb heat from rather than supply heat to the water is much larger than in the Conventional Fluctuation Theorem. This could be of relevance for micro/nano-technology.Comment: 10 pages, 6 figures. Some corrections in the text were made. Submitted to Physica

An Elementary Proof of Lyapunov Exponent Pairing for Hard-Sphere Systems at Constant Kinetic Energy

The conjugate pairing of Lyapunov exponents for a field-driven system with smooth inter-particle interaction at constant total kinetic energy was first proved by Dettmann and Morriss [Phys. Rev. E {\bf 53}, R5545 (1996)] using simple methods of geometry. Their proof was extended to systems interacting via hard-core inter-particle potentials by Wojtkowski and Liverani [Comm. Math. Phys. {\bf 194}, 47 (1998)], using more sophisticated methods. Another, and somewhat more direct version of the proof for hard-sphere systems has been provided by Ruelle [J. Stat. Phys. {\bf 95}, 393 (1999)]. However, these approaches for hard-sphere systems are somewhat difficult to follow. In this paper, a proof of the pairing of Lyapunov exponents for hard-sphere systems at constant kinetic energy is presented, based on a very simple explicit geometric construction, similar to that of Ruelle. Generalizations of this construction to higher dimensions and arbitrary shapes of scatterers or particles are trivial. This construction also works for hard-sphere systems in an external field with a Nos\'e-Hoover thermostat. However, there are situations of physical interest, where these proofs of conjugate pairing rule for systems interacting via hard-core inter-particle potentials break down.Comment: 16 pages, 4 figures, to appear in J. Stat. Phy

Education and Training in a Model of Endogenous Growth with Creative Destruction

By formulating an endogenous growth model that combines elements from Romer (1990), Aghion and Howitt (1992), and van Zon and Yetkiner (2003), the present paper studies the contribution of education and training on economic growth through their impact on the rate of innovation. The article addresses two main issues. The first is the optimum provision of on-the-job training necessary to be able to adopt, and adapt to new technologies. The second is the impact of both formal education and on-the-job training on the innovative capacity of an economic system that is the ultimate cause of output growth. In our set-up, education enhances R&D activities and lowers adjustment costs to new technologies, thus facilitating their adoption, while on the other hand on-the-job training ensures the possibility to implement the new coming technologies and reap all the related future profits. We assume that the adoption of a new technology consists of two periods, i.e. the training phase during which newly hired workers acquire the right amount of know how in order to become familiar with the specific new technology, and the implementation or production phase in which profit flows arise for firms and in which the cost savings that can be realized arise from productivity increases in the previous phase. By extending the training phase, entrepreneurs run a greater risk of shortening the production phase for a given arrival rate of new technologies that progressively erode the profit flows obtained from existing technologies. The paper shows first that it is possible to find a profit-maximizing, endogenously determined, amount of training that depends on the workers’ educational attainment. Thus, a situation in which better educated workers may be disproportionately selected for training issues is possible, especially in times of rapid technological change. However, the paper also shows that a non-linear relationship between education and technological change (and growth) exists, so that an increase in the formal level of education can even result in a reduction in the rate of growth. The reason for this is the increase in creative destruction that raises ‘technology adoption costs’ in terms of output foregone during re-training spells that arrive at a faster rate. The results offer some insights that are interesting from an education policy perspective.labour economics ;