From Smith to Schumpeter: A Theory of Take-off and Convergence to Sustained Growth
AbstractThe growth literature on the Industrial Revolution has produced novel insights that have changed the way economists think about the issue. Most of the available models, however, focus on the household and do not put industrial activity at the center of the analysis. Consequently, they leave out much that should be a prominent part of the story. According to Mokyr (2005) for example, the challenge for theory is to explain not only the quantitative change in growth rates, but also the qualitative transformation of the economy as sustained growth fueled by technological change become one of its persistent and thus defining features. In this paper I propose a model of the qualitative transformation of the economy that assigns the starring role to industry. I introduce land in a Schumpeterian growth model to characterize the transition to sustained growth. A distinctive feature of the model I propose is that it yields a closed-form solution for the transition path. Consequently, it provides an analytically transparent characterization of the dates of the events that drive the economy's phase transitions. In particular, it provides a structural mapping from fundamentals to the key turning points — take-offs, inflection, etc. — that characterize the shape of the economy's path.
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 InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c017_009.
Length: 33 pages
Date of creation: Sep 2012
Date of revision:
Endogenous Growth; Market Structure; Take-off;
Other versions of this item:
- Pietro F. Peretto, 2013. "From Smith to Schumpeter: A Theory of Take-Off and Convergence to Sustained Growth," Working Papers 13-10, Duke University, Department of Economics.
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mauro Rota & Luca Spinesi, 2013. "At the Onset of the original capital accumulation," Departmental Working Papers of Economics - University 'Roma Tre' 0179, Department of Economics - University Roma Tre.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michaela Rank).
If references are entirely missing, you can add them using this form.