IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/113502.html
   My bibliography  Save this paper

Natural Selection and Innovation-Driven Growth

Author

Listed:
  • Chu, Angus
  • Cozzi, Guido
  • Fan, Haichao

Abstract

This study develops an innovation-driven growth model with natural selection of heterogeneous households and endogenous takeoff. Families differ in their ability to accumulate human capital. In an early stage of development, households with lower education ability accumulate less human capital but choose to have more children and enjoy an evolutionary advantage. In a later stage of development, families with high education ability increase their number of children as their human capital rises over time. In the long run, high-ability households accumulate more human capital, and all families choose the same steady-state fertility rate. Therefore, households' population share and human capital converge to stationary distributions. Initially, the heterogeneity of households makes it more likely for an endogenous takeoff to occur; however, the temporary evolutionary disadvantage of high-ability families has a lasting negative impact on long-run growth. Finally, we provide evidence that heterogeneity in education indeed has adverse effects on education, innovation and economic growth in the long run.

Suggested Citation

  • Chu, Angus & Cozzi, Guido & Fan, Haichao, 2022. "Natural Selection and Innovation-Driven Growth," MPRA Paper 113502, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:113502
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/113502/1/MPRA_paper_113502.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/115672/1/MPRA_paper_115672.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/119658/1/MPRA_paper_119658.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/121217/1/MPRA_paper_121217.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Oded Galor & Omer Moav, 2002. "Natural Selection and the Origin of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1133-1191.
    2. Chu, Angus C. & Fan, Haichao & Wang, Xilin, 2020. "Status-seeking culture and development of capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 275-290.
    3. Jones Charles I., 2001. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-45, August.
    4. Pietro Peretto & Simone Valente, 2015. "Growth on a finite planet: resources, technology and population in the long run," Journal of Economic Growth, Springer, vol. 20(3), pages 305-331, September.
    5. Angus Chu & Guido Cozzi & Chih-Hsing Liao, 2013. "Endogenous fertility and human capital in a Schumpeterian growth model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 181-202, January.
    6. Chu, Angus C. & Furukawa, Yuichi & Zhu, Dongming, 2016. "Growth and parental preference for education in China," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 192-202.
    7. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293, Elsevier.
    8. Galor, Oded & Michalopoulos, Stelios, 2012. "Evolution and the growth process: Natural selection of entrepreneurial traits," Journal of Economic Theory, Elsevier, vol. 147(2), pages 759-780.
    9. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
    10. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, vol. 101(5), pages 2003-2041, August.
    11. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    12. Oded Galor, 2011. "Unified Growth Theory and Comparative Development," Rivista di Politica Economica, SIPI Spa, issue 2, pages 9-21, April-Jun.
    13. Marc Klemp & Jacob Weisdorf, 2019. "Fecundity, Fertility and The Formation of Human Capital," The Economic Journal, Royal Economic Society, vol. 129(618), pages 925-960.
    14. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    15. Peretto, Pietro F., 2015. "From Smith to Schumpeter: A theory of take-off and convergence to sustained growth," European Economic Review, Elsevier, vol. 78(C), pages 1-26.
    16. Maria Rosaria Carillo & Vincenzo Lombardo & Alberto Zazzaro, 2019. "The rise and fall of family firms in the process of development," Journal of Economic Growth, Springer, vol. 24(1), pages 43-78, March.
    17. Chu, Angus C. & Furukawa, Yuichi & Wang, Xilin, 2022. "Rent-seeking government and endogenous takeoff in a Schumpeterian economy," Journal of Macroeconomics, Elsevier, vol. 72(C).
    18. Alberto F. Alesina & Marlon Seror & David Y. Yang & Yang You & Weihong Zeng, 2020. "Persistence Despite Revolutions," NBER Working Papers 27053, National Bureau of Economic Research, Inc.
    19. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    20. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
    21. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1143-1179.
    22. Angus C. Chu & Zonglai Kou & Xilin Wang, 2020. "Effects of patents on the transition from stagnation to growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 395-411, April.
    23. Iacopetta, Maurizio & Peretto, Pietro F., 2021. "Corporate governance and industrialization," European Economic Review, Elsevier, vol. 135(C).
    24. Chu, Angus C. & Peretto, Pietro F. & Wang, Xilin, 2022. "Agricultural revolution and industrialization," Journal of Development Economics, Elsevier, vol. 158(C).
    25. Brunnschweiler, Christa N. & Peretto, Pietro F. & Valente, Simone, 2021. "Wealth creation, wealth dilution and demography," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 441-459.
    26. Iacopetta, Maurizio, 2010. "Phases of economic development and the transitional dynamics of an innovation-education growth model," European Economic Review, Elsevier, vol. 54(2), pages 317-330, February.
    27. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    28. Chu, Angus C. & Kou, Zonglai & Wang, Xilin, 2022. "Culture and stages of economic development," Economics Letters, Elsevier, vol. 210(C).
    29. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
    30. Connolly, Michelle & Peretto, Pietro F, 2003. "Industry and the Family: Two Engines of Growth," Journal of Economic Growth, Springer, vol. 8(1), pages 115-148, March.
    31. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    32. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-1091, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chu, Angus C. & Peretto, Pietro & Xu, Rongxin, 2023. "Export-led takeoff in a Schumpeterian economy," Journal of International Economics, Elsevier, vol. 145(C).
    2. Chu, Angus C. & Furukawa, Yuichi & Wang, Xilin, 2022. "Rent-seeking government and endogenous takeoff in a Schumpeterian economy," Journal of Macroeconomics, Elsevier, vol. 72(C).
    3. Chu, Angus C. & Fan, Haichao & Wang, Xilin, 2020. "Status-seeking culture and development of capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 275-290.
    4. Chu, Angus C. & Peretto, Pietro F. & Wang, Xilin, 2022. "Agricultural revolution and industrialization," Journal of Development Economics, Elsevier, vol. 158(C).
    5. Chu, Angus C. & Peretto, Pietro F., 2023. "Innovation and inequality from stagnation to growth," European Economic Review, Elsevier, vol. 160(C).
    6. Chu, Angus C. & Wang, Xilin, 2022. "Effects Of R&D Subsidies In A Hybrid Model Of Endogenous Growth And Semi-Endogenous Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 26(3), pages 813-832, April.
    7. Holger Strulik & Klaus Prettner & Alexia Prskawetz, 2013. "The past and future of knowledge-based growth," Journal of Economic Growth, Springer, vol. 18(4), pages 411-437, December.
    8. Lu Han, 2019. "The Mutable Geography of Firms' International Trade: Evidence and Macroeconomic Implications," Working Papers 201909, University of Liverpool, Department of Economics.
    9. Angus C. Chu & Zonglai Kou & Xilin Wang, 2020. "Effects of patents on the transition from stagnation to growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 395-411, April.
    10. Nguyen Thang Dao & Julio Dávila & Angela Greulich, 2021. "The education gender gap and the demographic transition in developing countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 431-474, April.
    11. Dietrich Vollrath, 2011. "The agricultural basis of comparative development," Journal of Economic Growth, Springer, vol. 16(4), pages 343-370, December.
    12. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, vol. 101(5), pages 2003-2041, August.
    13. Oded Galor, 2010. "The 2008 Lawrence R. Klein Lecture-Comparative Economic Development: Insights From Unified Growth Theory," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(1), pages 1-44, February.
    14. repec:got:cegedp:140 is not listed on IDEAS
    15. Lehmann-Hasemeyer, Sibylle H. & Prettner, Klaus & Tscheuschner, Paul, 2020. "The scientific revolution and its role in the transition to sustained economic growth," Hohenheim Discussion Papers in Business, Economics and Social Sciences 06-2020, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    16. Madsen, Jakob & Strulik, Holger, 2024. "Inequality and the Industrial Revolution," European Economic Review, Elsevier, vol. 164(C).
    17. Chu, Angus C. & Peretto, Pietro & Wang, Xilin, 2024. "Government spending and industrialization in a Schumpeterian economy," MPRA Paper 120797, University Library of Munich, Germany.
    18. Strulik, Holger & Werner, Katharina, 2014. "Elite education, mass education, and the transition to modern growth," University of Göttingen Working Papers in Economics 205, University of Goettingen, Department of Economics.
    19. Angus C. Chu & Yuichi Furukawa & Sushanta Mallick & Pietro Peretto & Xilin Wang, 2021. "Dynamic effects of patent policy on innovation and inequality in a Schumpeterian economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1429-1465, June.
    20. Carillo, Mario F., 2024. "Human capital composition and long-run economic growth," Economic Modelling, Elsevier, vol. 137(C).
    21. Bruno Lanz & Simon Dietz & Timothy Swanson, 2017. "Global Population Growth, Technology, And Malthusian Constraints: A Quantitative Growth Theoretic Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(3), pages 973-1006, August.

    More about this item

    Keywords

    natural selection; innovation; economic development;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:113502. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.