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Ideas and Growth

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  • Robert E. Lucas, Jr.

Abstract

What is it about modern capitalist economies that allows them, in contrast to all earlier societies, to generate sustained growth in productivity and living standards? It is widely agreed that the productivity growth of the industrialized economies is mainly an ongoing intellectual achievement, a sustained flow of new ideas. Are these ideas the achievements of a few geniuses, Newton, Beethoven, and a handful of others, viewed as external to the activities of ordinary people? Are they the product of a specialized research sector, engaged in the invention of patent-protected processes over which they have monopoly rights? Both images are based on important features of reality and both have inspired interesting growth theories, but neither seems to me central. What is central, I believe, is that fact that the industrial revolution involved the emergence (or rapid expansion) of a class of educated people, thousands-now many millions-of people who spend entire careers exchanging ideas, solving work-related problems, generating new knowledge.

Suggested Citation

  • Robert E. Lucas, Jr., 2008. "Ideas and Growth," NBER Working Papers 14133, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14133
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    • Robert E. Lucas, 2009. "Ideas and Growth," Economica, London School of Economics and Political Science, vol. 76(301), pages 1-19, February.

    References listed on IDEAS

    as
    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.
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    12. Prescott, Edward C & Boyd, John H, 1987. "Dynamic Coalitions: Engines of Growth," American Economic Review, American Economic Association, vol. 77(2), pages 63-67, May.
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    JEL classification:

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

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