Harashima, Taiji (2010): An Asymptotically Non-Scale Endogenous Growth Model.
Download (224kB) | Preview
This paper presents an endogenous growth model in which the economy grows without either scale effects or population growth. The key mechanism is substitution between investments in capital and technology when firms face increasing uncompensated knowledge spillovers. The model indicates that, as population increases, firms invest more in capital than in technology because there are more uncompensated knowledge spillovers as a result of both Marshall-Arrow-Romer and Jacobs externalities. Consequently, scale effects asymptotically diminish as population increases and disappear at a sufficiently large population while the economy can grow without population growth. In present-day industrialized economies, therefore, both scale effects and population growth have little influence over economic growth.
|Item Type:||MPRA Paper|
|Original Title:||An Asymptotically Non-Scale Endogenous Growth Model|
|Keywords:||Endogenous growth; Scale effects; Non scale model; Balanced growth; Knowledge spillovers|
|Subjects:||O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E10 - General
|Depositing User:||Taiji Harashima|
|Date Deposited:||25. Oct 2010 00:40|
|Last Modified:||15. Feb 2013 21:46|
Aghion, Philippe and Peter Howitt. (1992). “A Model of Growth through Creative Destruction,” Econometrica, Vol. 60, pp. 323–351.
Aghion, Philippe and Peter Howitt. (1998). Endogenous Growth Theory, Cambridge, MA, MIT Press.
Arrow, Kenneth J. (1962). “The Economic Implications of Learning by Doing,” Review of Economic Studies, Vol. 29, pp. 155–173.
Barro, Robert J. and Xavier Sala-i-Martin. (1995) Economic Growth, McGraw-Hill, New York.
Chen, Hsin-Ping. (2002). “Urban Externalities and City Growth in Taiwan,” The Annals of Regional Science, Vol. 36, pp. 531–550.
Dinopoulos, Elias and Peter Thompson. (1998). “Schumpeterian Growth without Scale Effects,” Journal of Economic Growth, Vol. 3, pp. 313–335.
Eicher, Theo S. and Stephen J. Turnovsky. (1999). “Non-Scale Models of Economic Growth,” The Economic Journal, Vol. 109, pp. 394–415.
Glaeser, Edward L., Hedi D. Kallal, Jose A. Scheinkman, and Andrei Shleifer. (1992). “Growth in Cities,” Journal of Political Economy, Vol. 100, pp. 1126–1152.
Grossman, Gene M. and Elhanan Helpman. (1991). Innovation and Growth in the Global Economy, Cambridge, MA, MIT Press.
Harashima, Taiji. (2004). “A New Asymptotically Non-Scale Endogenous Growth Model,” EconWPA Working Papers, ewp-dev/0412009.
Jacobs, Jane. (1969). The Economy of Cities, Random House, New York.
Jones, Charles I. (1995a). “Time Series Test of Endogenous Growth Models,” Quarterly Journal of Economics, Vol. 110, pp. 495–525.
Jones, Charles I. (1995b). “R&D-Based Models of Economic Growth,” Journal of Political Economy, Vol. 103, pp. 759–784.
Jones, Charles I. (1999). “Growth: With or Without Scale Effects?” American Economic Review Papers and Proceedings, Vol. 89, No.2, pp. 139–144.
Kortum, Samuel S. (1997). “Research, Patenting, and Technological Change,” Econometrica, Vol. 65, pp. 1389–1419.
Lucas, Robert E. (1988). “On the Mechanics of Economic Development,” Journal of Monetary Economics, Vol. 22, pp. 3–42.
Kaldor, Nicholas. (1961). “Capital Accumulation and Economic Growth,” Chap. 10 of A. Lutz and D. C. Hague (eds.), The Theory of Capital, St. Martin’s Press, New York.
Marshall, Alfred. (1890). Principles of Economics, Macmillan, London.
Peretto, Pietro. (1998). “Technological Change and Population Growth,” Journal of Economic Growth, Vol. 3, pp. 283–311.
Peretto, Pietro and Sjak Smulders. (2002). “Technological Distance, Growth and Scale Effects,” The Economic Journal, Vol. 112, pp. 603–624.
Romer, Paul M. (1986). “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94, pp. 1,002–1037.
Romer, Paul M. (1987). “Growth Based on Increasing Returns Due to Specialization,” American Economic Review Papers and Proceedings, Vol. 77, pp. 56–72.
Romer, Paul M. (1990). “Endogenous Technological Change,” Journal of Political Economy, Vol. 98, pp. S71–S102.
Segerstrom, Paul. (1998). “Endogenous Growth without Scale Effects,” American Economic Review, Vol. 88, pp. 1290–1310.
Stel, Andre and Henry Nieuwenhuijsen. (2002). “Knowledge Spillovers and Economic Growth,” Tinbergen Institute Discussion Paper, TI 2002-051/3.
Young, Alwyn. (1998). “Growth without Scale Effects,” Journal of Political Economy, Vol. 106, pp. 41–63.
Available Versions of this Item
- An Asymptotically Non-Scale Endogenous Growth Model. (deposited 25. Oct 2010 00:40) [Currently Displayed]