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Ideas and Growth

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  • ROBERT E. LUCAS

Abstract

This paper introduces and partially develops a new model of endogenous technological change, viewed as the product of a class of problem‐solving producers. The model, based on earlier work by Eaton and Kortum, is built up from the premise that all knowledge resides in the head of some individual person and the knowledge of a firm, or economy, or any group of people is simply the knowledge of the individuals that comprise it. The model is applied to an economy with a cohort structure. A calibration of the model using cross‐section earnings data, in addition to aggregate GDP growth, is considered.

Suggested Citation

  • Robert E. Lucas, 2009. "Ideas and Growth," Economica, London School of Economics and Political Science, vol. 76(301), pages 1-19, February.
    • Handle: RePEc:bla:econom:v:76:y:2009:i:301:p:1-19
    DOI: 10.1111/j.1468-0335.2008.00748.x
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Satyajit Chatterjee & Esteban Rossi‐Hansberg, 2012. "Spinoffs And The Market For Ideas," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 53-93, February.
    3. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966, Elsevier.
    4. Claudia Goldin & Lawrence F. Katz, 1999. "Education and Income in the Early 20th Century: Evidence from the Prairies," NBER Working Papers 7217, National Bureau of Economic Research, Inc.
    5. Sherwin Rosen, 1972. "Learning by Experience as Joint Production," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(3), pages 366-382.
    6. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2008. "Earnings Functions and Rates of Return," Journal of Human Capital, University of Chicago Press, vol. 2(1), pages 1-31.
    7. Boyan Jovanovic & Rafael Rob, 1989. "The Growth and Diffusion of Knowledge," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 569-582.
    8. Fernando E. Alvarez & Francisco J. Buera & Robert E. Lucas, Jr., 2008. "Models of Idea Flows," NBER Working Papers 14135, National Bureau of Economic Research, Inc.
    9. Nancy L. Stokey, 1991. "Human Capital, Product Quality, and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 587-616.
    10. Park, Ki Seong, 1997. "A Theory of On-the-Job Learning," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 61-81, February.
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    12. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
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    17. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-570, August.
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    20. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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