Balanced Growth with a Network of Ideas
AbstractWe propose a model of economic growth in which technological progress is modelled as an expanding random network of ideas. New ideas are created by combining successful old ideas. Old ideas are chosen according to their visibility as ideas, success as generators of innovations and age but the process is stochastic. The productivity of an innovation on the other hand depends on the number, importance and success of the neighbors to the parent idea. Within this framework, we isolate the conditions on the law governing the growth of the network compatible with balanced growth. The paper can be viewed as an attempt to provide microfoundations to the set of production functions compatible with the stylized facts of economic growth.
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Bibliographic InfoPaper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 546.
Date of creation: Sep 2005
Date of revision:
Economic growth; Technological progress; Innovations; Random growing network; Ideas; Scale-free distributions;
Find related papers by JEL classification:
- D30 - Microeconomics - - Distribution - - - General
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D90 - Microeconomics - - Intertemporal Choice - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-09-11 (All new papers)
- NEP-INO-2005-09-11 (Innovation)
- NEP-NET-2005-09-11 (Network Economics)
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