Life and Death of Innovation–what's next?€¦ · innovation How to increase utilities of...
Transcript of Life and Death of Innovation–what's next?€¦ · innovation How to increase utilities of...
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life and Death of Innovation–what’s next?
Hardy Hanappi Gizem [email protected] [email protected]
Department of EconomicsVienna University of Technology
16th Conference of the Research NetworkMacroeconomics and Macroeconomic Policies (FMM)
The State of Economics after the Crisis25 - 27 October 2012, Berlin
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Outline
1 Endogenous Needs, Values and TechnologyLife of Innovations
Accounting of ExchangeEvolution of Growth
Death of Innovations
2 What is next?European Economic Policy for the Short-run
3 New European Economy
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Endogenous Needs, Values and Technology
Exogenously given fixedpreferences andproduction functionIdentical marketmechanisms
Preferences structure andproduction in permanentfluxDiversifying marketmechanisms
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Life of Innovations
A new mode of production: the growth of labour productivity asa systematic force that permanently leads to new forms ofsocial relationships.
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Accounting of Exchange
A simple society with three economic sectors: farmers (f ),manufacturers (m) and state (s)
F =
d1 fm fsmf d2 mssf sm d3
E =
e1,1 e1,2 . . e1,ne2,1 . . . .. . . . .. . . . .
en,1 . . . en,n
Input–Output Flow Matrix Transfers between Enterprises
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Evolution of Growth
How do different species effect each others growth rates?Lotka–Volterra Two Species ModelDynamic Exploitation
Marx, Schumpeter:Dynamic exploitation of nature and working class→ profit→ technical and social innovation→ labour productivity
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Growth
New products and services create new utility dimensionsDiversity, complicated networks of interdependent andheterogeneous agents, entry and exitProblem of determining social value
Aggregation of individuals’ utility vector
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Aggregation
No interaction programs and use IO formalism to describesocial value
λ1
λ2
...λn
a11 a12 · · · a1na21 a22 · · · a2n
......
. . ....
an1 an2 · · · ann
λ1
λ2
...λn
`1
`2
...`n
The total value of net outputs YThe sum of direct labour time inputs L
Implies constant productivity of average individual YL
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Open Questions
Evolution of Growth – Heterogeneous agents’ approachAggregation: Technical coefficient matrix in permanentchange
a11 a12 · · · a1ma21 a22 · · · a2m
......
. . ....
am1 am2 · · · amm
b11 b12 · · · b1n
b21 b22 · · · b2n
......
. . ....
bn1 bn2 · · · bnn
process innovation
productinnovation
Innovation
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Death of InnovationSource: http://stat.oecd.org/
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Death of InnovationSource: http://stat.oecd.org/
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Life of InnovationsDeath of Innovations
Death of InnovationSource: http://stat.oecd.org/
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
European Economic Policy for the Short-run
Europe at the Crossroads
1 What are the choices for Europe?
Break-up or full-fledged2 Why should the Euro survive?
Economic decline, wider political diversity3 How can Europe survive?
Europe needs a plan
4 Will Europe survive?
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
European Economic Policy for the Short-run
European Economic Policy for the Short-run
Time is running short!!!
1 Debt2 Interest rates3 Banks4 Unemployment5 Social innovation
6 SMEs7 Devaluation of the Euro8 Wages9 Fiscal Authority
10 Education
Hanappi H., 2012, Can Europe Survive? Ten Commandments forEurope’s Next Ten Years, Papers for Evolutionary Political Economics(PEPE), No 9 (2012)
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
European Economic Policy for the Short-run
Innovation policy in Europe focuses on socialinnovation
How to increase utilities of Europe’s citizensStimulate participation in democratic processExport globally
Innovation policy in Europe focuses on social innovationDemocratic mechanisms for governance within Europe arepreferred to solely technological advances.
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
New European Economy
Game theoretic approachof Europe’s political economyDynamics of monetary andfiscal policies
MONETARY UNION
Unemployment
Interest rate
Banks Debt
Innovations
Devaluation Wages SMEs Education
National Governments
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
New European Economy
Game theoretic approachof Europe’s political economyDynamics of monetary andfiscal policies
MONETARY UNION
Unemployment
Interest rate
Banks Debt
Innovations
Devaluation Wages SMEs Education
National Governments
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?
Endogenous Needs, Values and TechnologyWhat is next?
New European EconomySummary
Summary
A better understanding – Heterogeneous agent basedapproachFiniteness of capitalisms – focus on social innovationNew European economy – democratic control on monetaryand fiscal policies in the EU
Hardy Hanappi, Gizem Yildirim Life and Death of Innovation–what’s next?