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The past and future of knowledge-based growth

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  • Strulik, Holger
  • Prettner, Klaus
  • Prskawetz, Alexia

Abstract

Conventional R&D-based growth theory argues that productivity growth is driven by population growth but the data suggest that the erstwhile positive correlation between population and productivity turned negative during the 20th century. In order to resolve this problem we integrate R&D-based innovations into a unified growth framework with micro-founded fertility and schooling behavior. The model explains the historical emergence of R&D-based growth and the subsequent emergence of mass education and the demographic transition. The ongoing child quality-quantity trade-off during the transition explains why in modern economies high growth of productivity and income is associated with low or negative population growth. Because growth in modern economies is based on the education of the workforce, the medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all developed countries - are much better than suggested by conventional R&D-based growth theories. --

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Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 140.

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Date of creation: 2012
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Handle: RePEc:zbw:cegedp:140

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Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
Web page: http://www.cege.wiso.uni-goettingen.de/
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Keywords: R&D; declining population; fertility; schooling; human capital.;

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Citations

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Cited by:
  1. Amavilah Voxi & Asongu Simplice & Andrés Antonio, 2014. "Globalization, Peace & Stability, Governance, and Knowledge Economy," Working Papers 14/012, African Governance and Development Institute..
  2. Prettner, Klaus & Werner, Katharina, 2014. "Human capital, basic research, and applied research: Three dimensions of human knowledge and their differential growth effects," Center for European, Governance and Economic Development Research Discussion Papers 186, University of Goettingen, Department of Economics.
  3. Colin Davis & Ken-ichi Hashimoto, 2014. "Industry Concentration, Knowledge Diffusion, and Economic Growth Without Scale Effects," Discussion Papers 1408, Graduate School of Economics, Kobe University.
  4. Strulik, Holger, 2014. "Contraception and Development: A Unified Growth Theory," Discussion Papers of Business and Economics 7/2014, Department of Business and Economics, University of Southern Denmark.
  5. Sasaki, Hiroaki & Hoshida, Keisuke, 2014. "Semi-Endogenous R&D Growth Model with Negative Population Growth," MPRA Paper 53833, University Library of Munich, Germany.
  6. Prettner, Klaus & Strulik, Holger, 2014. "It's A Sin - Contraceptive Use, Religious Beliefs, and Long-Run Economic Development," Discussion Papers of Business and Economics 11/2014, Department of Business and Economics, University of Southern Denmark.
  7. Prettner, Klaus & Strulik, Holger, 2014. "Technology, trade, and growth: The role of education," Center for European, Governance and Economic Development Research Discussion Papers 191, University of Goettingen, Department of Economics.
  8. Prettner, Klaus & Strulik, Holger, 2013. "Trade and productivity: The family connection redux," Center for European, Governance and Economic Development Research Discussion Papers 159, University of Goettingen, Department of Economics.
  9. Ines Lindner & Holger Strulik, 2014. "The Great Divergence: A Network Approach," Tinbergen Institute Discussion Papers 14-033/II, Tinbergen Institute.
  10. Lindner, Ines & Strulik, Holger, 2014. "The great divergence: A network approach," Center for European, Governance and Economic Development Research Discussion Papers 193, University of Goettingen, Department of Economics.

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