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Heterogeneous Researchers in a Two-Sector Representative Consumer Economy

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  • Orlando Gomes

    (Escola Superior de Comunicação Social)

Abstract

Research activities have uncertain outcomes. The question asked in this paper is whether or not this uncertainty can be a central piece on the explanation of long run consumption growth paths. More specifically, we inquire how the existence of different research projects, with different degrees of uncertainty, contribute to unpredictable consumption growth paths. The proposed scenario is a two-sector representative consumer model with researchers that invest in different innovation projects. There is heterogeneity in terms of risk associated to research programs (researchers invest in projects with the same expected outcome but different volatility). This difference in volatility, combined with an adaptive learning – bounded rationality rule, implies an aggregate index of technology and a consumption growth rate that do not present a predictable pattern over time.

Suggested Citation

  • Orlando Gomes, 2004. "Heterogeneous Researchers in a Two-Sector Representative Consumer Economy," GE, Growth, Math methods 0409009, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpge:0409009
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    References listed on IDEAS

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    More about this item

    Keywords

    Heterogeneous agents; Bounded rationality; Optimal control; Research activities; Volatility and chaos;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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