Learning in Times of Change: A Dynamic Explanation for Technological Progress

Abstract

This paper analyzes the dynamics for growth and cost reduction of innovative products and techniques in the energy sector. We provide examples showing that simple exponential relations can be used to describe growth and cost reduction as a function of time for many types of technologies. These two simple models,fortechnological growth and progress, respectively, taken together are shown to be de facto equivalentto the well-known learning curve. The main novelty of the stylistic computational component-based model we present is that it introduces time in the learning curve methodology. While there may be additional explanatory variables, we argue that accounting for time improves the understanding and use of learning curves.