How Predictable is Technological Progress?

@article{Farmer2015HowPI,
  title={How Predictable is Technological Progress?},
  author={J. Doyne Farmer and François Lafond},
  journal={Economics of Innovation eJournal},
  year={2015}
}
  • J. Farmer, F. Lafond
  • Published 18 February 2015
  • Computer Science
  • Economics of Innovation eJournal
Abstract Recently it has become clear that many technologies follow a generalized version of Moore's law, i.e. costs tend to drop exponentially, at different rates that depend on the technology. Here we formulate Moore's law as a correlated geometric random walk with drift, and apply it to historical data on 53 technologies. We derive a closed form expression approximating the distribution of forecast errors as a function of time. Based on hind-casting experiments we show that this works well… 

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