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Returns to specialization, competition, population, and growth

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  • Bucci, Alberto

Abstract

Using an expanding-variety endogenous growth model with purposive human capital accumulation, this paper provides an alternative explanation of why we may observe an ambiguous correlation between product market competition (PMC) and economic growth, and between population and economic growth rates. Our explanation is based on the notion of ‘returns to specialization’. Under the model's assumptions, PMC and economic growth are ambiguously correlated when returns to specialization are decreasing, whereas population growth and productivity growth are ambiguously correlated when returns to specialization are increasing. From a theoretical point of view, these results are explained by the presence or absence of an ‘increasing production-complexity’ effect associated to the use of a larger number of intermediate-input varieties in the same production process.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 37 (2013)
Issue (Month): 10 ()
Pages: 2023-2040

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Handle: RePEc:eee:dyncon:v:37:y:2013:i:10:p:2023-2040

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Web page: http://www.elsevier.com/locate/jedc

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Keywords: Semi-endogenous growth; Population growth; Human capital; R&D; Monopolistic competition; Returns to specialization;

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Cited by:
  1. Thomas Renstrom & Luca Spataro, 2014. "Population growth and human capital: a welfarist approach," Public Finance Research Papers 3, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome.

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