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The Division of Labor, Coordination Costs and the Growth of Government

The paper develops a dynamic, general equilibrium model of specialization-driven growth in which the private cost of coordinating among specialists is a function of public expenditure on physical and institutional infrastructure. Growth is characterized by endogenous increases in labor specialization, the capital-labor ratio, coordination costs, market size, and the interdependence of economic agents. In addition, model provides an explanation for a frequently ignored stylized fact of economic growth, the secular rise of government's share of output, in terms of the economic role of the government.

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File URL: http://economic.oswego.edu/papers/div_lab_gov.pdf
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Paper provided by Department of Economics, SUNY-Oswego in its series Departmental Working Papers with number 199803.

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Length: 45 pages
Date of creation: 01 Dec 1998
Date of revision: 01 Dec 1998
Handle: RePEc:nyo:oswaaa:199803
Contact details of provider: Postal: Department of Economics, SUNY-Oswego, Oswego, NY 13126, U.S.
Phone: 315-312-2175
Fax: 315-312-5444
Web page: http://www.oswego.edu/~economic/
Email:


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  1. 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.
  2. Xavier Sala-i-Martin, 1995. "The classical approach to convergence analysis," Economics Working Papers 117, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
  4. Baumgardner, James R, 1988. "The Division of Labor, Local Markets, and Worker Organization," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 509-27, June.
  5. Karl Shell, 2010. "Toward A Theory of Inventive Activity and Capital Accumulation," Levine's Working Paper Archive 1407, David K. Levine.
  6. Kim, Sunwoong, 1989. "Labor Specialization and the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 692-705, June.
  7. Becker, G.S. & Murphy, K.M., 1991. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - Economics Research Center 92-5, Chicago - Economics Research Center.
  8. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-55, July.
  9. Yang, Xiaokai, 1990. "Development, structural changes and urbanization," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 199-222, November.
  10. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
  11. Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
  12. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  13. Danny Quah, 1996. "Twin peaks : growth and convergence in models of distribution dynamics," LSE Research Online Documents on Economics 2278, London School of Economics and Political Science, LSE Library.
  14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  15. Rosen, Sherwin, 1983. "Specialization and Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 43-49, January.
  16. Yang, Xiaokai & Borland, Jeff, 1991. "A Microeconomic Mechanism for Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 460-82, June.
  17. Barzel, Yoram & Yu, Ben T, 1984. "The Effect of the Utilization Rate on the Division of Labor," Economic Inquiry, Western Economic Association International, vol. 22(1), pages 18-27, January.
  18. 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.
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