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Sources of U.S. Economic Growth in a World of Ideas

  • Jones, C.I.

At least since 1950, the U.S.economy has benefited from increases in both educational attainment and research intensity. Such changes suggest, contrary to the conventional view, that the U.S.economy is far from its steady-state balanced growth path. This paper develops a model in which these facts are reconciled with the stability of av- erage U.S. growth rates over the last century. In the model, long-run growth is driven by the worldwide discovery of new ideas, which in turn is tied to world population growth. Nevertheless, a constant growth path can temporarily be maintained at a rate greater than the long- run rate provided research intensity and educational attainment rise steadily over time. Growth accounting with this model reveals that 30 percent of U.S. growth between 1950 and 1993 is attributable to the rise in educational attainment, 50 percent is attributable to the rise in worldwide research intensity, and only about 10 to 15percent is due to the long-run component of growth related to the increase in world population.

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Paper provided by United Nations World Employment Programme- in its series Papers with number 99-29.

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Length: 39 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:unwoem:99-29
Contact details of provider: Postal: International Center for Economic Growth, 243 Kearny Street, San Francisco, California 94108.

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  1. Danny Quah, 1996. "The Invisible Hand and the Weightless Economy," CEP Occasional Papers 12, Centre for Economic Performance, LSE.
  2. Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
  3. Danny Quah, 1996. "The invisible hand and the weightless economy," LSE Research Online Documents on Economics 2271, London School of Economics and Political Science, LSE Library.
  4. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1996. "The Poverty of Nations: A Quantitative Exploration," NBER Working Papers 5414, National Bureau of Economic Research, Inc.
  5. Edmond S. Phelps, 1964. "Models of Technical Progress and the Golden Rule of Research," Cowles Foundation Discussion Papers 176, Cowles Foundation for Research in Economics, Yale University.
  6. West, Kenneth D, 1988. "Asymptotic Normality, When Regressors Have a Unit Root," Econometrica, Econometric Society, vol. 56(6), pages 1397-1417, November.
  7. Claudia Goldin, 1999. "A Brief History of Education in the United States," NBER Historical Working Papers 0119, National Bureau of Economic Research, Inc.
  8. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  9. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  10. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  11. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
  12. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  13. Griliches, Zvi, 1988. "Productivity Puzzles and R&D: Another Nonexplanation," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 9-21, Fall.
  14. McGrattan, Ellen R. & Schmitz, James Jr., 1999. "Explaining cross-country income differences," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 10, pages 669-737 Elsevier.
  15. William D. Nordhaus, 1969. "An Economic Theory of Technological Change," Cowles Foundation Discussion Papers 265, Cowles Foundation for Research in Economics, Yale University.
  16. 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 537-70, August.
  17. David, Paul A., 1977. "Invention and accumulation in america's economic growth: A nineteenth-century parable," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 6(1), pages 179-228, January.
  18. Ben-David, Dan & Papell, David H., 1995. "The great wars, the great crash, and steady state growth: Some new evidence about an old stylized fact," Journal of Monetary Economics, Elsevier, vol. 36(3), pages 453-475, December.
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