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On the promises and perils of Smithian growth – from pin factory to AI

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  • Miller, Marcus

    (University of Warwick)

Abstract

For path-breaking insights on how prices can guide the efficient allocation of resources and on how innovation and investment can spur economic growth, Adam Smith is justly renowned. He was, however, well aware of problems posed by market dominance – specifically in banking and, more generally, wherever getting to the scale that delivers increasing returns leads to monopolistic behaviour. For the historical record, we draw on the recent wide-ranging survey by Acemoglu and Johnson on how the benefits of innovation have been spread across society since the Industrial Revolution. We also consider these issues in the context of geo-political competition.

Suggested Citation

  • Miller, Marcus, 2023. "On the promises and perils of Smithian growth – from pin factory to AI," The Warwick Economics Research Paper Series (TWERPS) 1470, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1470
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2023/twerp_1470_-_miller.pdf
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    References listed on IDEAS

    as
    1. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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    More about this item

    Keywords

    The Wealth of Nations by Adam Smith ; Increasing Returns to Scale; monopoly ; excess risk-taking ; case studies of economic history ; geo-political competition. JEL Codes: B12 ; D61 ; E25 ; L12 ; O33 ; P51;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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