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A Nonscale Growth Model with R&D and Human Capital Accumulation

This paper presents an endogenous growth model that includes research and development and human capital accumulation. The model’s specification builds on the R&D-based structure of Romer’s [1990] model and introduces two functions: (1) A specification for the production of new designs that assumes no externalities and no inventions before time zero; and (2) A specification for the accumulation of human capital technically similar to that in Lucas [1988]. The model displays two main results. The first is that it eliminates the scale-effects prediction which is common to most R&D-based growth models, but which is not empirically supported. Secondly, the model offers a new prediction that growth depends positively on the ratio of final-good workers to researchers. Thus the model provides a theoretical explanation as to why developed countries have had rising numbers of researchers but not rising growth rates in the twentieth century.

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Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 5/2003.

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Date of creation: 2003
Date of revision:
Handle: RePEc:nip:nipewp:5/2003
Contact details of provider: Postal: Núcleo de Investigação em Políticas Económicas, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal
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  1. Helpman, E., 1991. "Endogenous Macroeconomic Growth Theory," Harvard Institute of Economic Research Working Papers 1570, Harvard - Institute of Economic Research.
  2. Peretto, Pietro F, 1998. " Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
  3. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
  4. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  6. repec:tpr:qjecon:v:105:y:1990:i:1:p:29-42 is not listed on IDEAS
  7. Charles I. Jones, 1999. "Growth: With or Without Scale Effects?," American Economic Review, American Economic Association, vol. 89(2), pages 139-144, May.
  8. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  9. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  10. Arnold, Lutz G., 2000. "Stability of the Market Equilibrium in Romer's Model of Endogenous Technological Change: A Complete Characterization," Journal of Macroeconomics, Elsevier, vol. 22(1), pages 69-84, January.
  11. Daniel Cohen, 1998. "The Wealth of the World and the Poverty of Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262032538, June.
  12. Richard N. Langlois, 2000. "Knowledge, Consumption, and Endogenous Growth," Working papers 2000-02, University of Connecticut, Department of Economics.
  13. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
  14. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
  15. Mills, Terence C & Crafts, N F R, 2000. "After the Golden Age: A Long-Run Perspective on Growth Rates That Speeded Up, Slowed Down and Still Differ," Manchester School, University of Manchester, vol. 68(1), pages 68-91, January.
  16. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  17. Blackburn, Keith & Hung, Victor T. Y. & Pozzolo, Alberto F., 2000. "Research, Development and Human Capital Accumulation," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 189-206, April.
  18. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, vol. 65(6), pages 1389-1420, November.
  19. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  20. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
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