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Balanced Growth with a Network of Ideas

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  • Christian Ghiglino

    (Queen Mary, University of London)

Abstract

We propose a model of economic growth in which technological progress is modelled as an expanding random network of ideas. New ideas are created by combining successful old ideas. Old ideas are chosen according to their visibility as ideas, success as generators of innovations and age but the process is stochastic. The productivity of an innovation on the other hand depends on the number, importance and success of the neighbors to the parent idea. Within this framework, we isolate the conditions on the law governing the growth of the network compatible with balanced growth. The paper can be viewed as an attempt to provide microfoundations to the set of production functions compatible with the stylized facts of economic growth.

Suggested Citation

  • Christian Ghiglino, 2005. "Balanced Growth with a Network of Ideas," Working Papers 546, Queen Mary University of London, School of Economics and Finance.
  • Handle: RePEc:qmw:qmwecw:wp546
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    File URL: http://www.econ.qmul.ac.uk/media/econ/research/workingpapers/archive/wp546.pdf
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    References listed on IDEAS

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    1. Martin L. Weitzman, 1998. "Recombinant Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 331-360.
    2. Ola Olsson, 2005. "Technological Opportunity and Growth," Journal of Economic Growth, Springer, vol. 10(1), pages 31-53, January.
    3. Fernando Leiva B., 2006. "Pricing Patents through Citations," 2006 Meeting Papers 834, Society for Economic Dynamics.
    4. Pietro Peretto & Sjak Smulders, 2002. "Technological Distance, Growth And Scale Effects," Economic Journal, Royal Economic Society, vol. 112(481), pages 603-624, July.
    5. Olsson, Ola, 2000. "Knowledge as a Set in Idea Space: An Epistemological View on Growth," Journal of Economic Growth, Springer, vol. 5(3), pages 253-275, September.
    6. Charles I. Jones, 2005. "The Shape of Production Functions and the Direction of Technical Change," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 517-549.
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    Cited by:

    1. Marcus Berliant & Masahisa Fujita, 2011. "The Dynamics of Knowledge Diversity and Economic Growth," Southern Economic Journal, Southern Economic Association, vol. 77(4), pages 856-884, April.

    More about this item

    Keywords

    Economic growth; Technological progress; Innovations; Random growing network; Ideas; Scale-free distributions;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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