Energy related innovation: the missing link. A revision and integration of the business cycle theories of Keynes and Schumpeter

Conference · Sat Jan 01 04:00:00 EST 1983

OSTI ID:5374693

Santini, D J

A theory is developed asserting that energy-induced first-cost-increasing waves of partially successful vehicle innovations cause depressions, while immediately successful cost-reducing innovations cause recessions. In a recession, cost-reducing innovations cause recessions. In a recession, cost-reducing innovations briefly drive down sales of vehicles using old technology. The reductions in cost, however, create opportunities for profit, while the success of the innovation allows other producers to copy it. Since consumer acceptance is high, sales increase and a boom follows. Depression innovations are characterized by a long sequence of partially successful first-cost increasing and operations cost decreasing vehicle innovations. Vehicle costs increase initially because of the investment needs for innovation. Uncertainty causes consumers to delay vehicle purchases. Defining sales cause increasing investment costs to be spread over fewer consumers, thus driving costs up further. The theory is contrasted with those of Keynes, Schumpeter, Kondratiev, and, of more recent vintage, Mensch and Freeman. The theory is tested quantitatively for the US during the 1783 to 1900 period, a period during which four long depressions occurred. Test results are highly consistent with the theory proposed.

• Research Organization: Argonne National Lab., IL (USA)
• DOE Contract Number: W-31109-ENG-38
• OSTI ID: 5374693
• Report Number(s): CONF-8310239-1; ON: DE84003614
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320203 -- Energy Conservation
Consumption
& Utilization-- Transportation-- Land & Roadway
AUTOMOBILES
COST
ECONOMIC IMPACT
ECONOMY
FUNCTIONAL MODELS
INVENTIONS
MODIFICATIONS
NORTH AMERICA
USA
VEHICLES