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‘Modern Capitalism’ in the 1970s and 1980s

In: Growth, Employment and Inflation

Author

Listed:
  • Jan Fagerberg
  • Bart Verspagen

Abstract

The past decade has witnessed important changes in how economic growth is conceived by the economic profession. The traditional neoclassical model (Solow, 1956), based on the ideas of perfect competition, decreasing returns and exogenous technology (a global public good), has had to give way to more realistic approaches emphasizing among other things innovation (through R&D investments or learning in private firms), scale economics and market power.1 This change of perspective was clearly anticipated by John Cornwall in his path-breaking study, Modern Capitalism (1977). Here he suggests a model of economic growth in which technological progress is endogenized, that is, an ‘endogenous growth model’ to use a more recent term. Manufacturing, Cornwall argues, plays an important role in this context, because it is the locus of technological progress, whether in the form of learning by doing (scale economics) or as the result of search activities by entrepreneurs. Hence his main focus is on what shapes growth in manufacturing (since this is considered to be the main source of overall growth).

Suggested Citation

  • Jan Fagerberg & Bart Verspagen, 1999. "‘Modern Capitalism’ in the 1970s and 1980s," Palgrave Macmillan Books, in: Mark Setterfield (ed.), Growth, Employment and Inflation, chapter 9, pages 113-126, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-349-27393-5_9
    DOI: 10.1007/978-1-349-27393-5_9
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    Cited by:

    1. Nelson Marconi & Igor L. Rocha & Guilherme R. Magacho, 2016. "Sectoral capabilities and productive structure: An input-output analysis of the key sectors of the Brazilian economy," Brazilian Journal of Political Economy, Center of Political Economy, vol. 36(3), pages 470-492.
    2. Tommaso Ciarli & André Lorentz & Marco Valente & Maria Savona, 2019. "Structural changes and growth regimes," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 119-176, March.
    3. Vertesy, D., 2014. "Successive leadership changes in the regional jet industry," MERIT Working Papers 2014-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Szirmai, Adam, 2012. "Industrialisation as an engine of growth in developing countries, 1950–2005," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 406-420.
    5. Eman Attiah, 2019. "The Role of Manufacturing and Service Sectors in Economic Growth: An Empirical Study of Developing Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 112-127.
    6. Fagerberg, Jan, 2000. "Technological progress, structural change and productivity growth: a comparative study," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 393-411, December.
    7. Silva, Ester G. & Teixeira, Aurora A.C., 2008. "Surveying structural change: Seminal contributions and a bibliometric account," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 273-300, December.
    8. Szirmai, Adam & Verspagen, Bart, 2015. "Manufacturing and economic growth in developing countries, 1950–2005," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 46-59.
    9. Correa Mautz, Felipe, 2016. "Pobreza, desigualdad y estructura productiva en ciudades: evidencia desde Chile usando datos de panel," Desarrollo Productivo 207, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. Sami Ben Mim & Abir Hedi & Mohamed Sami Ben Ali, 2022. "Industrialization, FDI and absorptive capacities: evidence from African Countries," Economic Change and Restructuring, Springer, vol. 55(3), pages 1739-1766, August.
    11. Lavopa, Alejandro & Szirmai, Adam, 2012. "Industrialization, employment and poverty," MERIT Working Papers 2012-081, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Guadagno, Francesca, 2016. "The determinanths of industrialisation in developing countries, 1960-2005," MERIT Working Papers 2016-031, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Szirmai, Adam, 2009. "Industrialisation as an engine of growth in developing countries," MERIT Working Papers 2009-010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Lavopa, Alejandro, 2011. "The impact of sectoral heterogeneities in economic growth and catching up: Empirical evidence for Latin American manufacturing industries," MERIT Working Papers 2011-075, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Lee, Keun & Lee, Jongho & Lee, Juneyoung, 2021. "Variety of national innovation systems (NIS) and alternative pathways to growth beyond the middle-income stage: Balanced, imbalanced, catching-up, and trapped NIS," World Development, Elsevier, vol. 144(C).
    16. Francesco Crespi & Mario Pianta, 2008. "Demand and innovation in productivity growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(6), pages 655-672.

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