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This article develops a model of growth and innovation in which accumulation dynamics of knowledge and R&D are explicitly considered. The model is based on a more general knowledge production process than commonly used in Endogenous Growth Theory and R&D productivity literatures, reconciling as special cases of a broader framework disparate analytical approaches. The model of knowledge dynamics highlights the role of human capital, physical capital, and accumulation in the creation of innovations and establishes the theoretical possibility of long-run idea-driven growth without the razor-edge assumption of Romer (1990) and in the absence of growth in R&D employment stipulated by Jones (1995). This analysis also predicts the structure of estimation biases that can result from omission of relevant factors and failure to take into account the accumulation dynamics of knowledge and R&D. Empirical estimation supports these predictions. Findings provide recommendations for future empirical studies aiming to explain innovation.

Growth theory argues on the role of heterogeneity that can lead to multiple regimes examining countries’ performance. A metaproduction stochastic function for the Bayesian frontier model is develop...

A large number of recent proofs indicate the irrationality of optimal resource allocation assumption in traditional economic growth theory, wherein resource misallocation (misallocation of capital ...

Post Keynesian (PK) growth models typically fail to model unemployment. That shows up in the absence of an equilibrium condition requiring the growth of employment to equal labor-supply gro...

The paradigm shift orchestrated by evolving New Growth Theory has “endogenized” technical change with its production embedded in the positive neoclassical belvedere. Knowledge no longer assumed as naturally endowed but demands a conscious organization and production by rationally optimizing the behavior of economic agents. The divergence in knowledge in Africa supports the assumption that confirmed the tacit nature of technological knowledge. This suggests that knowledge requires to build competitive economy is inarticulate and may not be easily transmitted at zero marginal cost. To this end, technological knowledge possesses the feature of an ordinary private good and can only be transmitted at a cost via imitation and apprenticeship. This study assesses the role of the knowledge types—basically codified (scientific knowledge) and tacit (technological and entrepreneurial knowledge) on the growth process in Africa for the period 1990–2017. The data used for the empirical investigation were obtained from the World Bank 2018 World Development Indicators and World Governance Indicators. The study adopted the System Generalized Method of Moments in performing empirical investigation. In addition, statistics from World Economic Forum’s Global Competitive Index and World Bank’s Human Capital Index were analyzed. The study found evidence supporting a strong link between technological knowledge (and entrepreneurial) and economic growth while the responsiveness of growth to scientific knowledge infinitesimally approaches zero. The paper recommends a framework that builds competitive knowledge capable of addressing developmental challenges. As domestic sufficiency is attained, trans-border transfers in terms of products and processes will attract wealth.

The role of energy consumption in production processes has received considerable attention from academic scholars in recent years because of the new assumptions in endogamous growth theory. Yet, th...

In 2015, the United Nations Research Institute for Social Development published a report Revisiting Sustainable Development (United Nations Research Institute for Social Development [UNRISD], 2015)...

This study develops a new approach for testing the validity of unbalanced growth theory as well as determining the sectoral priorities for investment in Indonesia over the period 1995–2015. To this...

This article presents a general critique of win-win arguments that pair gender equality and economic growth. Reviewing the “growth is good for women” and “gender equality is good for growth” arguments, the article argues that the win-win conclusions are contingent on particular notions of gender equality, measurement of output, work, well-being and policy. More importantly, these arguments also constrain the quest for substantive gender equality (“equality of outcomes”), since they rely on micro-level fixes to improve gender-equal access without challenging the neoliberal macroeconomic framework.

We analyse the implications of labour-market institutions on wage inequality in favour of skilled labour, on relative unemployment of unskilled labour, and on the economic growth rate in two clusters resulting from 27 OECD countries: Cluster 1, closely related with the Anglo-Saxon model, and Cluster 2, dominated by the Continental-European model. By linking the unskilled wage to the skilled one in Cluster 2, due to the indexation of social benefits to per-capita income, we accommodate the observed paths of the three variables in both clusters between 1991 and 2008: Cluster 1 presents a higher wage inequality in favour of skilled labour, a lower unemployment of the unskilled labour, and a better economic growth rate

This article proposes a theoretical knowledge-driven horizontal research and development (R&D) endogenous-growth model to explain, for 10 innovative countries, the co-movement of the respective R&D intensity, economic growth and firm-size growth, by exploring short-medium-run and long-run growth effects. Bearing in mind some recent literature, we improve the R&D technology, by considering that R&D is more labour intensive through time as complexity increases, that the diffusion of designs is affected by coordination, organizational and transportation costs, and that a potential entrant will come up with the right idea is reduced because of the presence of a larger number of entrants. We show that when the economy is not initially in a steady state, it can take a saddle path towards the unique and locally saddle-path stable interior steady state. Both transitional-dynamics and steady-state behaviours of our theoretical model are then consistent with, respectively, the time-series and the cross-sect...

The thesis of this book is startlingly simple – all empirical growth theory based on aggregate production functions (APF hereafter) is flawed because all estimates of parameters such as the elastic...

Modern growth theory derives mostly from Solow's “A Contribution to the Theory of Economic Growth” (1956). Solow's own interpretation locates its origins in his view that Harrod's growth model implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod's invoking a fixed-coefficients production function. We challenge Solow's reading of Harrod's “Essay in Dynamic Theory,” arguing that Harrod's object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed medium-run fluctuations, the “inherent instability” of economies. Solow's interpretation of Harrod was grounded in a particular culture of understanding embedded in the practice of formal modelling that emerged in economics in the post-Second World War period. Solow's interpretation, which ultimately dominated the profession's view of Harrod, is a case study in the difficulties in communicating across distinct interpretive commun...

This paper analyses the validity of second generation endogenous growth theories for six developed countries and ten manufacturing sectors over the period 1979–2001, applying modern tests and estimation procedures for the treatment of panel data. The basic autonomous innovation-driven model is extended to include international technology transfer and different measures of absorptive capacity. The estimates give great support to semi-endogenous growth theory. Furthermore, Schumpeterian or fully-endogenous growth theory has some support in the high impact of distance to the frontier variable which represents autonomous technology transfer.

This paper focuses on the evolution of the relationship between population and economic growth from Hume to New Growth Theory. In this paper, we show that there were two main views on the subject. There were those who assumed that the relationship between fertility rate and income was positive. On the other hand, there were those who raised the possibility that this linkage did not occur, and they emphasised that an increase in income did not necessarily lead to having more children. Following from Hicks’ methodological precept, the paper will show that their position on the issue was related to a socio-economic fact: the sibship size effect. We show that those who took the view that an increase in income leads to the desire to have more children did not take into consideration the sibship size effect, while those maintaining that there existed a negative relationship introduced into their utility function a sibship size effect.

The standard indicators used to compare cross-country innovation are in the Global Competitiveness Report (GCR). But there are problems with aggregation and response bias with these largely self-reported measures (Hollanders and van Cruysen, 2008).We propose a theory-based metric using Data Envelopment Analysis which corrects for sample bias and considers returns to scale. The derived ranking compares well to components of the GCR. Moreover, in second-stage estimations, our corrected efficiency score correlates well with standard Growth Theory indicators.

According to the neoclassical growth theory, export expansion could stimulate economic growth because it promotes specialisation and raises factor productivity. Thus, many developing countries depend heavily on export-orientated businesses to accelerate economic growth. Nevertheless, the causality evidences on the export-led growth hypothesis remain elusive and controversial. Two primary empirical questions emerged in the international trade and development literatures are: (a) Does the export-led growth hypothesis still valid? (b) Why causality evidences are inconsistent among studies? In light of these, the present study attempts to contribute to the export-led growth literature by using the Malaysian data set. This study covers the monthly data set from January 1975 to August 2010. To achieve the objectives of this study, we employ the leveraged bootstrap simulation causality test and also the rolling regression-based causality tests. The leveraged bootstrap simulation causality results suggest that ex...

SYNOPSISThis article sets out a discussion of a five-day nature-based programme at Penny Brohn Cancer Care. This programme is built on the work of Joseph Campbell, particularly his work towards what he called ‘The Monomyth’ of the Hero's Journey. Within this framework, facilitators lead the group both indoors (in the Garden Room) but also accessing the five-acre garden at Penny Brohn. This offers the participants the opportunity to use nature-oriented interventions that encourage reflection, self encounter, group sharing and connection to nature. Within this article, the process of the course is explored and its connection to the Hero's Journey expanded. The writer also compares the possible outcomes with the work of post-traumatic growth theory and research. it is proposed that a future research/evaluation project could be carried out to explore impact within the themes set out in aspects of post-traumatic growth research.

Standard growth theory emphasizes the closure of gaps: as internationalization proceeds, socioeconomic, structural characteristics of different countries become similar. Despite the fact that the European Union (EU) represents a historical experiment of a region of gradually strengthening internationalization, a wide range of EU studies reject the convergence hypothesis, showing an unclear development of standard deviation in time. Many of the studies find that something went wrong in the 1980s, yet they describe it as the result of a temporary effect. In the present paper, we show that the puzzle of the 1980s is not a short-term break in a continuous trend, but a complete alteration of the process, a structural shift toward a persisting period of continuous divergence! The previous trend of closing the gap among the member countries was reversed completely: in 2010, the coefficient of variation returned to higher levels than those of 1960. Second, all previous gains of labor vanished: in the period 1980-...

Penrose's book The Theory of the Growth of the Firm presents a growth theory that overwhelmingly relates to organic growth, with little explicit focus on acquisitive growth. This article addresses the gap in her growth theory by drawing on the historical case of Enodis, and insights from the resource-based view of the firm, to develop a Penrosean theory of acquisitive growth. It concludes that acquisitive growth not only enables a firm to grow more quickly, but that under specific conditions, through its increase in the diversity of resources at the disposal of managers, it may act as a spur to future organic growth.

We examine a carbon budget-based climate policy in a multi-region Integrated Assessment Model with intertemporal optimization. Innovation and technology diffusion are endogenized in a modern growth theory-based setup that is unique in integrated assessment. They can be directed towards energy or labour productivity. We study in detail how the strength and direction of innovation and technology diffusion influence the dynamic pattern of decarbonization and the structure of mitigation costs. For this purpose, we apply extended decomposition methods for decarbonization and consumption effects. We show that with high labour productivity growth, optimal decarbonization starts earlier and gains from emission permit trade for developing countries are dominated by output reductions. Therefore, additional transfers to developing countries will likely be necessary in a world of high labour productivity growth.

Regional Growth Theory (1973) by Harry Richardson was one of a series of books on many aspects of regional and urban economics published by the author during in a period spanning roughly 1969–78 (R...

A key feature of early endogenous growth models is their prediction of scale effects – the larger the economy, as measured by population, the number of firms or employment, the faster the economy should grow. However, empirical work has failed to support the existence of scale effects. As a result, much human capital has been expended in order to ‘fix’ this problem by eliminating scale effects in endogenous growth models. We contend that econometric techniques used in the empirical search for scale effects are inconsistent with growth theory. Using data from US states and an econometric technique that better matches growth theory by allowing each economy to have its own steady state, we provide empirical support for the existence of scale effects. Results call into question the need to reformulate the first models of endogenous growth.

This paper investigates empirically the occurrence of pecuniary knowledge externalities at the sector level across European economies. The main results suggest that, although some sectors can be considered as playing a particularly important role as a source of pecuniary knowledge externalities in the majority of examined countries, there exist significant national differences in the occurrence of these effects. Moreover, such external effects influence the dynamics of total factor productivity in downstream sectors and appear as a relevant source of growth in modern economies. As such, the concept of pecuniary knowledge externalities, as opposed to pure knowledge externalities postulated in the new growth theory, provides a new understanding of the growth process.

Many instructors in subjects such as economics are frequently concerned with how to teach technical material to undergraduate students with limited mathematical backgrounds. One method that has proven successful for the authors is to connect theoretically sophisticated material with actual data. This enables students to see how the theory relates to the real world, allowing for a deeper understanding of both. The authors developed a simple and insightful empirical application of the Solow growth model that can be used in an undergraduate macroeconomics or economic growth course. The exercise uses a data set on perception of corruption levels by country to look at the relationship between corruption and the level and rate of growth of output per worker across 70 countries. The results not only allow students to see for themselves the impact that corruption has on gross domestic product per worker but also improve their understanding of the distinction between level effects and long-run growth effects.

Uniform and large scale ZnO nanorods were successfully prepared by a simple chemical precipitation without any structure directing agents, the prominent merit in this mild process is that the final products do not need subsequent calcinations in an oven. Depending on the synthetic conditions used, the products with hexagonal shape consist mainly of high regularly nanorods with an average diameters of 120 nm or so, while the aspect ratio can be controlled about 8. The ZnO nanorods exhibit a strong ultraviolet emission and a very weak blue band at room temperature. The growth mechanism for the formation of ZnO nanorods was preliminarily explained by polar crystal growth theory and lowest energy arguments.

Russian macroeconomic growth in the transition era is analysed across federal districts using a neoclassical production function often found in studies of Soviet-era economic growth. An adjusted capital stock series for Russian regions is created and used in the aggregate production function for 1995–2003 to analyse growth across the 11 federal districts in Russia. Federal district output growth is found to be explained well by neoclassical growth theory, indicating that poorer regions may converge to richer regions, thereby strengthening the Russian Federation. Federal districts also have high capital/labour ratios, suggesting that expanded regional domestic and foreign investment across Russia in the future will enhance growth.

In a recent paper, Cavusoglu and Tebaldi (2006) provided an evaluation of neoclassical and endogenous growth theories according to Lakatos's methodology of scientific research programmes. This paper offers three criticisms of their contribution as well as a rival Lakatosian appraisal of growth theories. First, we hold that Cavusoglu and Tebaldi do not provide a proper structure of theory comparison in their contribution. Second, we argue that they use an inadequate version of Lakatos's appraisal criterion. Third, against the claim of the authors, we show that there are seminal endogenous growth models, which predict income convergence among countries. Finally, in contrast to Cavusoglu and Tebaldi, our analysis suggests that by Lakatos's standards, Schumpeterian variant of endogenous growth theory is both theoretically and empirically progressive over neoclassical growth theory.

Development economics is understood as a postwar phenomenon without antecedents. Yet, Veblen's contribution to development economics was once widely disseminated and acknowledged. Veblen's evolutionary economics centered on historically relative and limited truths applicable to specific cultures. Veblen's growth theory is a theory of economic development: quantitative accumulation is significant because it engenders qualitative change. Veblen's analysis of the harnessing of the economic potential centers on the ability of a society to successfully introduce scientific and technological advances, giving rise to increasing returns as the surplus is invested in industrial activities. Veblen presented oblique comments and startling insights in a non-empirical manner.

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth, Regional Studies. Endogenous growth theory emerged in the 1990s as ‘new growth theory’ accounting for technical progress in the growth process. This paper examines the role of research and development (R&D) workers underlying the Romer model (1990) and its subsequent modifications, and compares it with a model based on the accumulation of human capital engaged in R&D. Cross-section estimates of the models against productivity growth of European regions in the 1990s suggest that each R&D worker has a unique set of knowledge while his/her contributions are enhanced by knowledge sharing within a region as well as spillovers from other regions in proximity.

A Solow type two‐sector growth model is used to examine several issues related to growth and unemployment in a minimum wage economy. By simulating the model, we demonstrate that given the same percentage increase in wage rate, an economy with a higher capital–labor ratio is more likely to decay. More importantly, a tariff policy reduces the unemployment periods by 92% provided that the current capital–labor ratio is one‐sixth of that of the steady state capital–labor ratio. We assume that the first best policy of uniform wage subsidy is not politically feasible.

Rigorous approaches to aggregation indicate that aggregate production functions do not exist except in unlikely special cases. This paper considers the awkward implications for growth economics. It provides a conventional defence of growth theory in terms of ‘parables’ and then considers how empirical growth research might avoid the need for aggregate production functions.

Understanding the factors determining economic growth has been a major concern for economists and governing bodies for many years. The Solow growth model and the endogenous growth models are the main theories tested and used in the growth literature. This paper discusses the main contributions to economic methodology and uses Lakatos's scientific research program framework to evaluate the main theoretical contributions to growth theory. Based on Lakatos's ideas, Solovian models are both empirically and theoretically progressive. Endogenous growth models, on the other hand, are not empirically corroborated, and thus not progressive in Lakatosian sense. However, there are many reasons for rational growth economists to continue working in this field, even facing empirical refutations of an important theoretical prediction. Endogenous growth models are promising in terms of generating enormous gains that will help us better understand the mechanisms of economic growth.

Recently the focus of R&D impact on productivity moves from internal to external innovation. This paper assesses the link between R&D spillovers and productivity of 1017 Italian manufacturing firms over 1995–2000. Different proxies of R&D spillovers and several specification tests are used to select a well-behaved fixed effect model. As predicted by various new growth theory models, external R&D exerts a positive and highly significant effect on firms’ productivity growth.

Kronthaler F. (2005) Economic capability of East German regions: results of a cluster analysis, Regional Studies 39 , 739–750. This paper analyses the economic capability of East German regions compared with West German regions. Based on new growth theory and new economic geography, and using relevant empirical literature, regions are clustered according to a set of growth factors. The clustering results find little evidence that the economic capability of East German regions is already comparable with West German regions. Economic disadvantages are particularly rooted in lower technical progress, a lack of entrepreneurship, lower business and industrial concentration, and a loss of human capital. However, there are a few East German regions with a high economic capability, but even those suffer from economic disadvantages such as lower technical progress, lower industrial activity and a poorer regional accessibility.

While the copper industry has had an important role in Chile's economic development for more than 150 years, a dramatic increase in copper production has provided the base for strong new growth and development since the late 1980s. The recent Chilean success supports the traditional view of the positive relationship between mineral exploitation and mineral development. As such, it provides a strong counter example to the resource curse thesis, recently proposed by several authors. Using a simple policy framework outlined by Weber‐Fahr (2002), this paper considers several of the key reasons that appear to be important to the recent Chilean success story. It then proceeds to consider how these fit in with suggested policy strategies suggested by the World Bank, and also by Ross (2001).

Distinguishing between profit led and growth led demand regimes, we analyze the conditions of existence and stability of long run equilibrium of unemployment. The model we employ has at its center the relation between growth and distribution. Growth can be either wage led or profit led. Distribution itself is a function of the unemployment rate, with higher unemployment leading to a higher profit share. We use Okun's Law to close the model, making the change of the rate of unemployment a function of growth. The interesting result of our analysis is that in profit led demand regime the short run and long run equilibrium are stable. However, if the demand regime is wage led, the same conditions that guarantee stability of the goods market equilibrium in the short run render impossible the existence of a long run equilibrium rate of unemployment, and vice versa. Thus, if Kalecki's proposition that higher wages lead to higher growth is true, there will be no equilibrium rate of unemployment in the long run that serves as an anchor for the economic system. A revised version of the paper is forthcoming in the Review of Political Economy. Please contact the author for the revised version.

Although scholars and policy makers have widely acknowledged the importance of so-called high-technology industries as drivers of economic change, they have paid insufficient attention to the interaction between high-tech sectors and the remainder of the economy in developed countries. We contend that any constructive view of economic change must recognize the importance of the diffusion of innovative products and processes to the economy as a whole through the role that firms in established sectors play as customers and suppliers for high-tech firms. It is important to insure that the ""Receptive Capacity'' that these firms bring to innovative situations is as high as possible. To demonstrate our point, we first use ""old'' growth theory to develop a model of economic change and then show how this model ties in with ""new' ' growth theory by providing a convincing justification for investment in R&D and other innovative activities.

Growth rates of PPS and PVDF spherulites in very thin films were measured. The growth rates change by about four orders of magnitude within the crystallization temperature ranges examined in this work. Film thickness at the position of the spherulite for which growth rates were determined was measured; the film thickness was deduced from retardation in the spherulite. In the light of the criterion we proposed, film thicknesses more than several tens of microns are required for the growth rate to change by four orders of magnitude. However, the thickness of the thinnest film examined experimentally was less than 1 μm. This discrepancy between theory and experiment is large and violates the framework of the traditional growth model unrecoverably.

This paper provides a critical survey of the principal theoretical issues and empirical findings relating to the analysis of the economic growth of small states. This analysis provides a brief critique of the inapplicability of the Lewis model of industrialization to small states. It draws upon insights derived from endogenous growth theory to demonstrate that growth in small states can be explained by the key 'conditioning' variables, notably openness to trade, human capital accumulation and location. Further, the impact of small size and 'islandness' are argued to play less significant roles than that generally ascribed to them in the literature. The findings provide useful policy lessons for other small states and developing countries.

(2001). What Does the Aggregate Production Function Show? Further thoughts on Solow’s “Second thoughts on Growth Theory”. Journal of Post Keynesian Economics: Vol. 23, No. 4, pp. 589-615.

We highlighted by freeze-fracture the lamellate phase Lα (ID) in SDS-formamide system. This phase succeeds in increasing concentration into surfactant with the cubic phase Qα (Ia3d). The lamellate phase is observed in electron microscopy and corresponds to high values of the concentrations into amphiphilic going up to 100%. Of this fact it is easily vitrified by hardening. Our work enabled us to observe in the system SDS-formamide two possible morphologies of the phase Lα: smooth fractures presenting the setbacks in which appears a periodicity, and fractures revealing stacking of plates of decreasing diameter, forming kinds of turrets. In this second case, we give an explanation of the formation of the towers based on germination and growth theory.

Electron backscattered diffraction (EBSD) has been demonstrated to be a valuable tool in gathering data to aid in the understanding of microstructural development in a variety of materials. A high strength interstitial free steel has been studied using the capabilities of a modern EBSD system, particularly by use of the crystal orientation mapping facility. Grain boundary characteristics have been determined and used to develop an understanding of the recrystallisation process. Little evidence in favour of the oriented growth theory has been found. It is proposed that the nucleation process during annealing is critical in controlling the fully annealed texture.

Ireland has been the economic success story of the 1990s. Growth in GNP and in employment has far exceeded those seen elsewhere. We ask first whether this is simply a delayed catching-up process. Even if this turns out to be so, the question remains as to what the key differences in policy were between the unsuccessful phase, from 1950 to 1988, and the phenomenally successful phase since then. We present a brief overview of the key differences in terms familiar from conventional growth theory, and go on to look more carefully at the constellation of factors explaining the precise timing of the turnaround in economic fortunes.

(2000). The AK Model of “New” Growth Theory Is the Harrod-Domar Growth Equation: Investment and Growth Revisited. Journal of Post Keynesian Economics: Vol. 22, No. 3, pp. 427-435.

This paper presents, within a new growth theory framework, an analysis of the role of Foreign Direct Investment (FDI) in promoting economic growth. Evidence reported suggests that an important role is exerted by both the size of the domestic market and the competitive climate in relation to local producers. In addition, evidence is reported to indicate that interactions between FDI and human capital exert an especially important influence upon growth performance.

This paper discusses the reasons for the success of the new growth theory. Given that the NGT does not appear to say much new about empirical reality, that its essential ideas have been known for a long time, and that it does not really make contact with a large literature on institutions and economic change, its strong success may arguably be seen as surprising. Or, at least, its success may appear peculiar to Lakatosian methodologists, and others who emphasize notions such as ‘novel facts’. The reason for the success of the NGT is argued to lie in its constituting a case of strong heuristic progress: it brought growth through knowledge accumulation within the confines of neoclassical economics, and thus demonstrated the continued viability of this research tradition.

Since their emergence as distinct fields of inquiry in the early post‐Second World War period there has been an uneasy relationship between growth economics and development economics. The emergence of a richer ‘new growth economics’ has opened up the possibilities of a more fruitful dialogue between the two subdisciplines. In spite of recent advances, particularly with respect to the human capital, an understanding of differences in growth rates and income levels across countries remains elusive. Further advances will require that growth economists broaden their research agenda to embrace a number of concepts that have become conventional in development economics.

Recent growth theory fails to provide a convincing account of underdevelopment in terms of economic “fundamentals”. As a result, many accounts cite “bad” government policy (including the failure to support appropriate institutions) as a causal factor behind stagnation. Yet this perspective is hard to understand from the viewpoint of welfare economics. This paper studies theories of endogenous policy which can possibly account for such bad policy. I stress three (interrelated) general intuitions about the causes of bad policy which apply, irrespective of the type of political regime: (1) inability to use transfers to separate efficiency and distribution, (2) inability to commit, (3) the close connection between development and changes in the distribution of political power. I particularly stress the ability (or inability) of these theories to explain cross country differences.