Knowledge Creation and Technology Diffusion: A Framework to Understand Economic Growth
Keywords:
technology diffusion, human capital, economic growth, optimal control, transitional dynamicsAbstract
The most influential explanations of economic growth along the past five decades rely on two main items: human capital accumulation and the dissemination of knowledge/technological diffusion. These items traditionally appear as separate growth sources. In this paper an integrated perspective is adopted. We begin by building a growth model where two goals regarding technological achievements are considered; economic agents simultaneously want to expand the theoretical knowledge frontier and to reduce the gap between ready-to-use techniques and potentially available knowledge. Considering an objective function that captures the two pointed goals, one develops an intertemporal optimization setup concerning a two sector scenario. The first sector adapts existent technology to productive uses, while the second is an education sector. In this way, we can study the close relationship between technical progress and human capital generation decisions under an intertemporal perspective.Downloads
References
Acemoglu, D. (2003). Factor prices and technical change: From induced innovations to recent debates. in P. Aghion, R. Frydman, J. Stiglitz and M. Woodford (eds.) Knowledge, Information and Expectations in Modern Macroeconomics (in honor of Edmund S. Phelps). Princeton, New Jersey: Princeton University Press, 464–491.
Aghion, P., & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60(2), 323–351. https://doi.org/10.2307/2951599
Aghion, P., Howitt, P., & Violante, G. (2003). Wage inequality and technological change: A nelson-Phelps approach. in P. Aghion, R. Frydman, J. Stiglitz and M. Woodford (eds.) Knowledge, Information and Expectations in Modern Macroeconomics (in honor of Edmund S. Phelps). Princeton, New Jersey: Princeton University Press, 443–461.
Andolfatto, D., & MacDonald, G. M. (1998). Technology diffusion and aggregate dynamics. Review of Economic Dynamics, 1(2), 338–370. https://doi.org/10.1006/redy.1998.0018
Benhabib, J., & Spiegel, M. (2002). Human capital and technology diffusion. Federal Reserve Bank of San Francisco, Working Papers in Applied Economic Theory, Nº 2003-02.
Boldrin, M., & Levine, D. K. (2001). Growth cycles and market crashes. Journal of Economic Theory, 96(1-2), 13–39. https://doi.org/10.1006/jeth.1999.2595
Bond, E. W., Wang, P., & Yip, C. K. (1996). A general two-Sector model of endogenous growth with human and physical capital: Balanced growth and transitional dynamics. Journal of Economic Theory, 68(1), 149–173. https://doi.org/10.1006/jeth.1996.0008
Bresnahan, T. F., & Trajtenberg, M. (1995). General purpose technologies ‘Engines of growth’? Journal of Econometrics, 65(1), 83–108. https://doi.org/10.1016/0304-4076(94)01598-t
Caballé, J., & Santos, M. S. (1993). On endogenous growth with physical and human capital. Journal of Political Economy, 101(6), 1042–1067.
Cass, D. (1965). Optimum growth in an aggregative model of capital accumulation. The Review of Economic Studies, 32(3), 233–240. https://doi.org/10.2307/2295827
Evans, G. W., Honkapohja, S., & Romer, P. M. (1998). Growth cycles. American Economic Review, 88(3), 495–515.
Hall, B., & Khan, B. (2003). Adoption of new technology. Economics Department, University of California, Berkeley, Working Paper E03-330.
Helpman, E. (1998). General purpose technologies and economic growth. MIT Press.
Keller, W. (2002). Trade and the transmission of technology. Journal of Economic Growth, 7(1), 5–24. https://doi.org/10.1023/a:1013461025733
Keller, W. (2004). International technology diffusion. Journal of Economic Literature, 42(3), 752–782. https://doi.org/10.1257/0022051042177685
Koopmans, T. C. (1965). On the concept of optimal economic growth. in The Economic Approach to Development Planning. Amsterdam: North Holland.
Ladron de Guevara, A., Ortigueira, S., & Santos, M. S. (1999). A two-Sector model of endogenous growth with leisure. Review of Economic Studies, 66(3), 609–631. https://doi.org/10.1111/1467-937x.00100
Mukoyama, T. (2003). A theory of technology diffusion. mimeo. Concordia University, Canada.
Mulligan, C. B., & Sala-I-Martin, X. (1993). Transitional dynamics in two-Sector models of endogenous growth. The Quarterly Journal of Economics, 108(3), 739–773. https://doi.org/10.2307/2118407
Nelson, R. R., & Phelps, E. S. (1966). Investment in humans, technological diffusion and economic growth. American Economic Review, 56(2), 69–75.
Ramsey, F. P. (1928). A mathematical theory of saving. The Economic Journal, 38(152), 543–559. https://doi.org/10.2307/2224098
Romer, P. M. (1986). Increasing returns and long-Run growth. Journal of Political Economy, 94(5), 1002–1037. https://doi.org/10.1086/261420
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102. https://doi.org/10.1086/261725
Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94. https://doi.org/10.2307/1884513
Solow, R. M. (1994). Perspectives on growth theory. Journal of Economic Perspectives, 8(1), 45–54. https://doi.org/10.1257/jep.8.1.45
Solow, R. M. (2003). General comments on Part IV. in P. Aghion, R. Frydman, J. Stiglitz and M. Woodford (eds.) Knowledge, Information and Expectations in Modern Macroeconomics (in honor of Edmund S. Phelps). Princeton, New Jersey: Princeton University Press, 546–549.
Stiver, J. (2003). Technology creation, diffusion and growth cycles. University of Connecticut Working Paper Nº 2003-35.
Swan, T. W. (1956). ECONOMIC GROWTH and CAPITAL ACCUMULATION. Economic Record, 32(2), 334–361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x
Uzawa, H. (1965). Optimum technical change in an aggregative model of economic growth. International Economic Review, 6(1), 18–31. https://doi.org/10.2307/2525621
Xie, D. (1994). Divergence in economic performance: Transitional dynamics with multiple equilibria. Journal of Economic Theory, 63(1), 97–112. https://doi.org/10.1006/jeth.1994.1034
Young, A. (1998). Growth without scale effects. Journal of Political Economy, 106(1), 41–63. https://doi.org/10.1086/250002
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2005 Orlando Gomes
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Article usage
- ViewsTimes this article's page was opened since the journal started recording statistics. One person can visit more than once.
- 198
- DownloadsTimes the full text of this article (usually the PDF) was opened or downloaded.
- 278
All time, as recorded by the journal.
Last 2 years: 77 views, 112 downloads.
1.40 downloads per view (journal average 1.65).Downloads of the full text for every abstract view of this article, compared with the whole journal.
Explore the journal's metrics
