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Population and Ideas: A Theory of Endogenous Growth

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Charles I. Jones

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Abstract

December 3, 1998 -- Version 4.0

All growth models are linear in some sense, and the endogenous growth literature can be read as the search for the appropriate linear differential equation. Linearity is a "crucial" assumption, in the sense used by Solow (1956), and it therefore seems reasonable to ask that this assumption have an intuitive and compelling justification. This paper proposes that such a justification can be found if the linearity is located in an endogenous fertility equation. It is a fact of nature that the law of motion for population is linear: people reproduce in proportion to their number. By itself, this linearity will not generate per capita growth, but it is nevertheless the first crucial ingredient of such a model. The second crucial ingredient is increasing returns to scale. A justification for increasing returns, rather than linearity in the equation for technological progress, is the fundamental insight of the idea-based growth literature according to this view. Endogenous fertility together with increasing returns generates endogenous growth.

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Paper provided by Stanford University, Department of Economics in its series Working Papers with number 98014.

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  1. Solow, Robert M, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter. [Downloadable!] (restricted)
  2. Alwyn Young, 1995. "Growth Without Scale Effects," NBER Working Papers 5211, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June. [Downloadable!] (restricted)
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  4. Paul M. Romer, 1987. "Crazy Explanations for the Productivity Slowdown," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 163-210 National Bureau of Economic Research, Inc. [Downloadable!]
  5. Nordhaus, William D, 1969. "An Economic Theory of Technological Change," American Economic Review, American Economic Association, vol. 59(2), pages 18-28, May. [Downloadable!] (restricted)
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  6. Judd, Kenneth L, 1985. "On the Performance of Patents," Econometrica, Econometric Society, vol. 53(3), pages 567-85, May. [Downloadable!] (restricted)
  7. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  8. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec.. [Downloadable!] (restricted)
  9. Edmond S. Phelps, 1964. "Models of Technical Progress and the Golden Rule of Research," Cowles Foundation Discussion Papers 176, Cowles Foundation, Yale University. [Downloadable!]
  10. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-87, June. [Downloadable!] (restricted)
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  11. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  12. Raut, L K & Srinivasan, T N, 1994. "Dynamics of Endogenous Growth," Economic Theory, Springer, vol. 4(5), pages 777-90, August.
  13. Pitchford, John, 1972. "Population and Optimal Growth," Econometrica, Econometric Society, vol. 40(1), pages 109-36, January. [Downloadable!] (restricted)
  14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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  1. Erich Gundlach, 2003. "Growth Effects of EU Membership: The Case of East Germany," Empirica, Springer, vol. 30(3), pages 237-270, September. [Downloadable!] (restricted)
  2. Grimaud, André, 2002. "Non Convexities, Imperfect Competition and Growth," IDEI Working Papers 150, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  3. Alberto Bucci, 2006. "Product Market Competition, R&D Effort and Economic Growth," DEGIT Conference Papers c011_037, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
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  4. Creina Day, 2006. "Population and Endogenous Growth," ANUCBE School of Economics Working Papers 2006-475, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
  5. Holger Strulik, 2005. "Too Much of a Good Thing? The Quantitative Economics of R&D–driven Growth Revisited," Discussion Papers 05-26, University of Copenhagen. Department of Economics. [Downloadable!]
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  6. Orlando Gomes, 2004. "A Second-Order Approximation to Technology Choices," GE, Growth, Math methods 0409007, EconWPA. [Downloadable!]
  7. Holger Strulik, 2001. "The Role of Human Capital and Population Growth in R&D-Based Models of Economic Growth," Quantitative Macroeconomics Working Papers 20109, Hamburg University, Department of Economics. [Downloadable!]
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  8. Grimaud, André & Rougé, Luc, 2003. "Polluting Non-Renewable Resources, Innovation and Growth : Welfare and Environmental Policy," IDEI Working Papers 206, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  9. Charles I. Jones, . "Growth: With or Without Scale Effects?," Working Papers 99001, Stanford University, Department of Economics. [Downloadable!]
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  10. Orlando Gomes, 2004. "Heterogeneous Researchers in a Two-Sector Representative Consumer Economy," GE, Growth, Math methods 0409009, EconWPA. [Downloadable!]
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  11. Andreas Schäfer, 2002. "Endogenous Growth with Endogenous Fertility and Social Discrimination in Education," Thuenen-Series of Applied Economic Theory 35, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  12. Grimaud, André, 2008. "Weightless Economy, Knowledge Goods and Schumpeterian Growth," IDEI Working Papers 501, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  13. Jacob L. Weisdorf, 2004. "From Domestic Manufacture to Industrial Revolution: Long-Run Growth and Agrucultural Development," Discussion Papers 04-06, University of Copenhagen. Department of Economics. [Downloadable!]
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  14. Grimaud, André & Tournemaine, Frédéric, 2004. "Funding Research and Educating People in a Growth Model with Increasing Population," IDEI Working Papers 262, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  15. Krzysztof Cichy, 2009. "Human Capital and Technological Progress as the Determinants of Economic Growth," National Bank of Poland Working Papers 60, National Bank of Poland, Economic Institute. [Downloadable!]
  16. Sung Jin Kang, 2000. "Relative Backwardness and Technological Catching Up with Scale Effects," Econometric Society World Congress 2000 Contributed Papers 0407, Econometric Society. [Downloadable!]
  17. Growiec, Jakub, 2008. "Knife-edge conditions in the modeling of long-run growth regularities," MPRA Paper 9956, University Library of Munich, Germany. [Downloadable!]
  18. Gomes, Orlando, 2006. "Space, growth and technology: an integrated dynamic approach," MPRA Paper 2846, University Library of Munich, Germany. [Downloadable!]
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  19. Taiji Harashima, 2004. "A New Asymptotically Non-Scale Endogenous Growth Model," Development and Comp Systems 0412009, EconWPA, revised 20 Dec 2004. [Downloadable!]
  20. Gerry Boyle & Tom McCarthy & Jim Walsh, 1999. "Regional Income Differentials and the Issue of Regional Equalisation in Ireland," Economics, Finance and Accounting Department Working Paper Series n880499, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth. [Downloadable!]
  21. Grimaud, André & Tournemaine, Frédéric, 2003. "Funding Directly Research in Growth Models Without Intermediate Goods," IDEI Working Papers 207, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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