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Product-Variety, Population, Competition, and Growth

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  • Alberto Bucci

Abstract

This paper analyzes how population and product market competition (PMC) interact with each other in affecting productivity growth. We find that only a fully endogenous growth model with purposeful investment in human capital, an input in the production of intermediate goods, can simultaneously predict (as suggested by the available theoretical/empirical literature) that the relationships between population and economic growth rates and between PMC and economic growth are non-monotonic. The trade-off between specialization-gains and complexity-costs arising from an expansion of product-variety is crucial in determining the sign of these correlations, and the possible complementarity between two key variables in economic growth.

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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c016_006.

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Length: 36 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:deg:conpap:c016_006

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Related research

Keywords: Endogenous and semi-endogenous growth; Population (size and growth); Human capital; Horizontal innovation; Scale effects; Monopolistic competition;

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References

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  1. Alberto BUCCI, 2009. "Population, innovation, competition and growth with and without human capital investment," Departmental Working Papers 2009-46, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  2. Avner Ahituv, 2001. "Be fruitful or multiply: On the interplay between fertility and economic development," Journal of Population Economics, Springer, vol. 14(1), pages 51-71.
  3. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and Innovation: An Inverted U Relationship," NBER Working Papers 9269, National Bureau of Economic Research, Inc.
  4. Bucci, Alberto, 2008. "Population growth in a model of economic growth with human capital accumulation and horizontal R&D," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1124-1147, September.
  5. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
  6. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, December.
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Cited by:
  1. Dmitry A. Veselov, 2013. "Redistribution and the political support of free entry policy in the Schumpeterian model with heterogenous agents," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00830027, HAL.

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