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Increasing Returns and New Developments in the Theory of Growth

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  • Paul M. Romer

Abstract

From the beginning, growth theory has been faced with technically challenging questions about increasing returns and the way to capture ideas in a model of market exchange. Initially, reliance on perfect competition forced growth theory to narrow its scope. Recently, new tools for studying dynamic equilibria with nonconvexities, externalities, and imperfect competition have allowed growth theory to address broader questions like: Why have growth rates tended to increase over time? Why is it that flows of capital are not sufficient to equalize wages in different countries? How is it that trade policy, or aggregate research and development expenditure, or the extent of patent protection influences the rate of growth?

Suggested Citation

  • Paul M. Romer, 1989. "Increasing Returns and New Developments in the Theory of Growth," NBER Working Papers 3098, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3098
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    References listed on IDEAS

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    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Robert Wilson, 1975. "Informational Economies of Scale," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 184-195, Spring.
    5. Xie, Danyang, 1991. "Increasing Returns and Increasing Rates of Growth," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 429-435, April.
    6. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-380, December.
    7. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    8. F. H. Knight, 1924. "Some Fallacies in the Interpretation of Social Cost," The Quarterly Journal of Economics, Oxford University Press, vol. 38(4), pages 582-606.
    9. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    10. 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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    Citations

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    Cited by:

    1. Guillaume Daudin, 2003. "Do Frontiers give of do frontiers take ? The case of intercontinental trade in France at the end of the Ancien Régime," Documents de Travail de l'OFCE 2003-03, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Theo Klundert & Lex Meijdam, 1993. "Endogenous growth and income distribution," Journal of Economics, Springer, vol. 58(1), pages 53-75, February.
    3. Diana Esperanza Olmos, Nelson Mauricio Peña, Darío José Salcedo, Andrés Ignacio Velásquez, 2011. "Modelo De Crecimiento Endógeno En La Industria De Fabricación De Productos Alimenticios En Colombia," REVISTA ISOCUANTA 012291, UNIVERSIDAD SANTO TOMÁS.
    4. Patrick Artus, 1993. "Croissance endogène : revue des modèles et tentatives de synthèse," Revue Économique, Programme National Persée, vol. 44(2), pages 189-228.
    5. Uday Bhanu Sinha, 2001. "Patent Protection, Innovation Rate and Welfare," Departmental Working Papers wp0106, National University of Singapore, Department of Economics.
    6. Kaies Samet, 2010. "The creative intelligence," Working Papers hal-00512539, HAL.
    7. Vito Tanzi & Parthasarathi Shome, 1992. "The Role of Taxation in the Development of East Asian Economies," NBER Chapters,in: The Political Economy of Tax Reform, NBER-EASE Volume 1, pages 31-65 National Bureau of Economic Research, Inc.
    8. A. Arrighetti & G. Seravalli, 1998. "Sviluppo economico, convergenza e istituzioni intermedie," Economics Department Working Papers 1998-EP08, Department of Economics, Parma University (Italy).
    9. Kaies Samet, 2010. "The creative intelligence," Working paper serie RMT - Grenoble Ecole de Management hal-00512539, HAL.
    10. repec:ipg:wpaper:2014-362 is not listed on IDEAS
    11. Edna Maria Villarreal Peralta, 2011. "Rendimientos sociales de la educación en México 2005-2010," Investigaciones de Economía de la Educación volume 6,in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 55, pages 898-916 Asociación de Economía de la Educación.
    12. Bednarik, Radek & Filipova, Lenka, 2009. "The role of religion and political regime for human capital and economic development," MPRA Paper 14556, University Library of Munich, Germany.

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