TECHNOLOGY REVOLUTIONS AND THE GESTATION OF NEW TECHNOLOGIES

We formalize an explanation for technology revolutions and growth cycl es in a model where consumers and firms benefit from periodic changes in technology which result in the development and marketing of new gen erations of products. We characterize the equilibrium and analyze the effects of changing the rate of technology growth, resource endowment, and R&D and production costs on the duration of generations of produc ts and the frequency of technology revolutions, and hence the growth c ycles.