Semi-Endogenous or Fully Endogenous Growth? A Unified Theory.
Type
working paper
Date Issued
2021-11-30
Author(s)
Abstract
Is growth ultimately fully endogenous or semi-endogenous? A quarter-century of theoretical and empirical growth economics has still kept both possibilities open. Consequently, I assume that R&D-driven growth is a general combination of both semi-endogenous and fully endogenous mechanisms.
I here prove that if the semi-endogenous growth component is essential to the actual growth mechanism, the long-run growth rate will follow the semi-endogenous growth predictions. On the other hand, if the semi-endogenous is not essential, the fully endogenous growth mechanism may dictate the long run if the world population does not grow too fast.
This result holds regardless of whether fully endogenous growth is essential.
I also prove that if no other (third) growth mechanism exists, it suffices to prove that less research always leads to fewer innovations to ascertain semi-endogenous growth essentiality.
I here prove that if the semi-endogenous growth component is essential to the actual growth mechanism, the long-run growth rate will follow the semi-endogenous growth predictions. On the other hand, if the semi-endogenous is not essential, the fully endogenous growth mechanism may dictate the long run if the world population does not grow too fast.
This result holds regardless of whether fully endogenous growth is essential.
I also prove that if no other (third) growth mechanism exists, it suffices to prove that less research always leads to fewer innovations to ascertain semi-endogenous growth essentiality.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Subject(s)
Contact Email Address
guido.cozzi@unisg.ch
References
Bloom, N., Jones, C., J. Van Reenen, and Webb, M., (2020), "Are Ideas Getting Harder to Find?", American Economic Review, 110, 4, pp. 1104--1144
Chu, A. and W. Wang (2020), "Effects of R&D Subsidies in a Hybrid Model of Endogenous Growth and Semi-endogenous Growth", Macroeconomics Dynamics, 24, 8, pp. 1-20.
Cozzi, G. 2017a, "Endogenous growth, semi-endogenous growth... or both? A simple hybrid model", Economics Letters, May, 28-30.
Cozzi, G. 2017b, "Combining Semi-Endogenous and Fully Endogenous Growth: a Generalization", Economics Letters, vol. 155, June, page 89-91.
Dinopoulos, E. and Thompson, P.S., 1998, "Schumpeterian Growth Without Scale Effects", Journal of Economic Growth, 3, 313-335.
Ha, J. and Howitt, P., 2007, "Accounting for trends in productivity and R&D: A Schumpeterian critique of semi-endogenous growth theory," Journal of Money, Credit and Banking, 39 (4), 733--774.
Howitt, P., 1999. Steady Endogenous Growth with Population and R&D Inputs Growing. Journal of Political Economy, 107, 715-730.
Jones, C., 1995a. "Time Series Tests of Endogenous Growth Models", The Quarterly Journal of Economics, 110,2, pp, 495--525,
Jones, C., 1995b. "R&D-Based Models of Economic Growth," Journal of Political Economy, 103, 4, 759--784.
Jones, C., 1999, "Growth: With or Without Scale Effects?", American Economic Review, 89, 2, pp. 139-144.
Jones, C., 2005, "Growth in a World of Ideas", in P. Aghion and S. Durlauf (eds.) Handbook of Economic Growth, 1063-1111.
Jones, C. and J. Williams, 1998, "Measuring the Social Return to R&D", Quarterly Journal of Economics, 113, 1119-1135.
Kortum, S., 1997, "Research, Patenting, and Technological Change," Econometrica, 65 (6),1389--1419
Madsen, J. B., 2008: "Semi-Endogenous versus Schumpeterian Growth Models: Testing the Knowledge Production Function Using International Data," Journal of Economic Growth, 13, 1-26.
Minniti, A., Venturini, F., 2017. "The long-run growth effects of R&D policy". Research Policy, pp. 46, 316-326.
Peretto, P., 1998. Technological Change and Population Growth. Journal of Economic Growth, 3, 283-311.
Romer, P., 1990. Endogenous Technological Change. Journal of Political Economy, 98, S71-102.
Segerstrom, P. 1998, "Endogenous Growth Without Scale Effects," American Economic Review, 1290-1310.
Smulders, S. and van de Klundert, T., 1995, "Imperfect competition, concentration and growth with firm-specific R&D," European Economic Review, January, vol. 39(1), 139-160.
Venturini, F., 2012. "Product variety, product quality, and evidence of Schumpeterian endogenous growth: A note", Economics Letters, 117, 74-77.
Young, A., 1998, "Growth without Scale Effects", Journal of Political Economy, 106 (1),41--63.
Chu, A. and W. Wang (2020), "Effects of R&D Subsidies in a Hybrid Model of Endogenous Growth and Semi-endogenous Growth", Macroeconomics Dynamics, 24, 8, pp. 1-20.
Cozzi, G. 2017a, "Endogenous growth, semi-endogenous growth... or both? A simple hybrid model", Economics Letters, May, 28-30.
Cozzi, G. 2017b, "Combining Semi-Endogenous and Fully Endogenous Growth: a Generalization", Economics Letters, vol. 155, June, page 89-91.
Dinopoulos, E. and Thompson, P.S., 1998, "Schumpeterian Growth Without Scale Effects", Journal of Economic Growth, 3, 313-335.
Ha, J. and Howitt, P., 2007, "Accounting for trends in productivity and R&D: A Schumpeterian critique of semi-endogenous growth theory," Journal of Money, Credit and Banking, 39 (4), 733--774.
Howitt, P., 1999. Steady Endogenous Growth with Population and R&D Inputs Growing. Journal of Political Economy, 107, 715-730.
Jones, C., 1995a. "Time Series Tests of Endogenous Growth Models", The Quarterly Journal of Economics, 110,2, pp, 495--525,
Jones, C., 1995b. "R&D-Based Models of Economic Growth," Journal of Political Economy, 103, 4, 759--784.
Jones, C., 1999, "Growth: With or Without Scale Effects?", American Economic Review, 89, 2, pp. 139-144.
Jones, C., 2005, "Growth in a World of Ideas", in P. Aghion and S. Durlauf (eds.) Handbook of Economic Growth, 1063-1111.
Jones, C. and J. Williams, 1998, "Measuring the Social Return to R&D", Quarterly Journal of Economics, 113, 1119-1135.
Kortum, S., 1997, "Research, Patenting, and Technological Change," Econometrica, 65 (6),1389--1419
Madsen, J. B., 2008: "Semi-Endogenous versus Schumpeterian Growth Models: Testing the Knowledge Production Function Using International Data," Journal of Economic Growth, 13, 1-26.
Minniti, A., Venturini, F., 2017. "The long-run growth effects of R&D policy". Research Policy, pp. 46, 316-326.
Peretto, P., 1998. Technological Change and Population Growth. Journal of Economic Growth, 3, 283-311.
Romer, P., 1990. Endogenous Technological Change. Journal of Political Economy, 98, S71-102.
Segerstrom, P. 1998, "Endogenous Growth Without Scale Effects," American Economic Review, 1290-1310.
Smulders, S. and van de Klundert, T., 1995, "Imperfect competition, concentration and growth with firm-specific R&D," European Economic Review, January, vol. 39(1), 139-160.
Venturini, F., 2012. "Product variety, product quality, and evidence of Schumpeterian endogenous growth: A note", Economics Letters, 117, 74-77.
Young, A., 1998, "Growth without Scale Effects", Journal of Political Economy, 106 (1),41--63.
Eprints ID
265015
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