Scientific breakthroughs, innovation clusters and stochastic growth cycles

Manfred Stadler

No 60, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: We develop a dynamic stochastic general-equilibrium model of science, education and innovation to explain the simultaneous emergence of innovation clusters and stochastic growth cycles. Firms devote human-capital resources to research activities in order to invent higher quality products. The technological requirements in climbing up the quality ladders increase over time but this hampering effect is compensated for by an improving qualification of researchers allowing for a sustainable process of innovation and scale-invariant growth. Jumps in human capital, triggered by scientific breakthroughs, induce innovation clusters across industries and generate long-run growth cycles.

Keywords: Science; Education; Innovation clusters; Stochastic growth cycles (search for similar items in EconPapers)
JEL-codes: C61 E32 O33 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-dge, nep-ent, nep-fdg, nep-hrm, nep-ino, nep-knm, nep-mac, nep-ore, nep-sog and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:60

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