Munich Personal RePEc Archive

An Asymptotically Non-Scale Endogenous Growth Model

Harashima, Taiji (2010): An Asymptotically Non-Scale Endogenous Growth Model.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_26025.pdf

Download (219Kb) | Preview

Abstract

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.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.