Teaching Profit Seeking as the Source of Growth
AbstractThis paper offers an alternative to the typical presentation of economic growth theory in standard introductory textbooks. The standard textbook presents neoclassical production functions with diminishing marginal returns and predictions of convergence. For many students, the incentives to learn this are weak since the theory is abstract and its initial predictions inaccurate. A few changes to the presentation can create clarity and believability. One change is to present both creative destruction and rent seeking as possible paths of the profit motive. In this case, not only can students find greater consistency with their own observations, whereby profits can be well-earned or ill-gotten, but students can find consistency with the cross-country data and the simultaneous existence of converging and diverging countries. Students will be more motivated to understand neoclassical production functions with diminishing returns, since they are relevant for all countries of the world, not just an abstract few.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Economics Network, University of Bristol in its journal International Review of Economics Education.
Volume (Year): 11 (2012)
Issue (Month): 2 ()
Contact details of provider:
Postal: University of Bristol, BS8 1HH, United Kingdom
Fax: +44(0)117 331 4396
Web page: http://www.economicsnetwork.ac.uk/iree
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2002.
"Institutions and the resource curse,"
GE, Growth, Math methods
- Mehlum, Halvor & Moene, Karl-Ove & Torvik, Ragnar, 2003. "Institutions and the resource curse," Memorandum 29/2002, Oslo University, Department of Economics.
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2004. "Institutions and the Resource Curse," DEGIT Conference Papers c009_012, DEGIT, Dynamics, Economic Growth, and International Trade.
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2002. "Institutions and the resource curse," Development and Comp Systems 0210003, EconWPA.
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, January.
- Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002.
"Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development,"
NBER Working Papers
9305, National Bureau of Economic Research, Inc.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- Paul Romer, 1991.
"Endogenous Technological Change,"
NBER Working Papers
3210, National Bureau of Economic Research, Inc.
- Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August.
- S. Illeris & G. Akehurst, 2002. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 22(1), pages 1-3, January.
- T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Kin Bing Wu, 2010. "Education," World Bank Other Operational Studies 10133, The World Bank.
- Kwoka, John E, Jr, 1992. "Market Segmentation by Price-Quality Schedules: Some Evidence from Automobiles," The Journal of Business, University of Chicago Press, vol. 65(4), pages 615-28, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin Poulter).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.