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Population and Ideas: A Theory of Endogenous Growth

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  • Charles I. Jones

Abstract

December 3, 1998 -- Version 4.0 All growth models are linear in some sense, and the endogenous growth literature can be read as the search for the appropriate linear differential equation. Linearity is a "crucial" assumption, in the sense used by Solow (1956), and it therefore seems reasonable to ask that this assumption have an intuitive and compelling justification. This paper proposes that such a justification can be found if the linearity is located in an endogenous fertility equation. It is a fact of nature that the law of motion for population is linear: people reproduce in proportion to their number. By itself, this linearity will not generate per capita growth, but it is nevertheless the first crucial ingredient of such a model. The second crucial ingredient is increasing returns to scale. A justification for increasing returns, rather than linearity in the equation for technological progress, is the fundamental insight of the idea-based growth literature according to this view. Endogenous fertility together with increasing returns generates endogenous growth.

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  • Charles I. Jones, "undated". "Population and Ideas: A Theory of Endogenous Growth," Working Papers 98014, Stanford University, Department of Economics.
  • Handle: RePEc:wop:stanec:98014
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    Cited by:

    1. Erich Gundlach, 2003. "Growth Effects of EU Membership: The Case of East Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 237-270, September.
    2. Momota, Akira & Futagami, Koichi, 2000. "Demographic transition pattern in a small country," Economics Letters, Elsevier, vol. 67(2), pages 231-237, May.
    3. Growiec, Jakub, 2010. "Knife-edge conditions in the modeling of long-run growth regularities," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1143-1154, December.
    4. Michele Battisti & Massimo Del Gatto & Christopher F. Parmeter, 2018. "Labor productivity growth: disentangling technology and capital accumulation," Journal of Economic Growth, Springer, vol. 23(1), pages 111-143, March.
    5. Jacob L. Weisdorf, 2006. "From domestic manufacture to Industrial Revolution: long-run growth and agricultural development," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 264-287, April.
    6. Charles I. Jones, 1999. "Growth: With or Without Scale Effects?," American Economic Review, American Economic Association, vol. 89(2), pages 139-144, May.
    7. Gomes, Orlando, 2006. "Heterogeneous Researchers in a Two-Sector Representative Consumer Economy," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 60(2), November.
    8. Orlando Gomes, 2007. "Space, growth and technology: an integrated dynamic approach," Studies in Economics and Finance, Emerald Group Publishing, vol. 24(4), pages 248-265, October.
    9. Alberto Bucci, 2005. "Product Market Competition, R&D Effort and Economic Growth," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1011, Universitá degli Studi di Milano.
    10. Masters, William A & McMillan, Margaret S, 2001. "Climate and Scale in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 167-186, September.
    11. Krzysztof Cichy, 2009. "Human Capital and Technological Progress as the Determinants of Economic Growth," NBP Working Papers 60, Narodowy Bank Polski, Economic Research Department.
    12. Sung Jin Kang, 2000. "Relative Backwardness and Technological Catching Up with Scale Effects," Econometric Society World Congress 2000 Contributed Papers 0407, Econometric Society.
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    14. Danut-Vasile JEMNA, 2011. "Demographic transition and economic growth in Romania," THE YEARBOOK OF THE "GH. ZANE" INSTITUTE OF ECONOMIC RESEARCHES, Gheorghe Zane Institute for Economic and Social Research ( from THE ROMANIAN ACADEMY, JASSY BRANCH), vol. 20(2), pages 103-112.
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    16. Piero Manfredi & Luciano Fanti, 2006. "Demography In Macroeconomic Models: When Labour Supply Matters For Economic Cycles," Metroeconomica, Wiley Blackwell, vol. 57(4), pages 536-563, November.
    17. Hajamini, Mehdi, 2015. "The non-linear effect of population growth and linear effect of age structure on per capita income: A threshold dynamic panel structural model," Economic Analysis and Policy, Elsevier, vol. 46(C), pages 43-58.
    18. Gerry Boyle & Tom McCarthy & Jim Walsh, 1999. "Regional Income Differentials and the Issue of Regional Equalisation in Ireland," Economics, Finance and Accounting Department Working Paper Series n880499, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    19. Paul J. Zak, 2002. "Genetics, family structure, and economic growth," Journal of Evolutionary Economics, Springer, vol. 12(3), pages 343-365.
    20. Wongboonsin, Kua & Phiromswad, Piyachart, 2017. "Searching for empirical linkages between demographic structure and economic growth," Economic Modelling, Elsevier, vol. 60(C), pages 364-379.
    21. Koichi Futagami & Yasushi Ohkusa, 2003. "The Quality Ladder and Product Variety: Larger Economies May Not Grow Faster," The Japanese Economic Review, Japanese Economic Association, vol. 54(3), pages 336-351, September.
    22. Creina Day, 2006. "Population and Endogenous Growth," ANU Working Papers in Economics and Econometrics 2006-475, Australian National University, College of Business and Economics, School of Economics.
    23. Orlando Gomes, 2004. "A Second-Order Approximation to Technology Choices," GE, Growth, Math methods 0409007, University Library of Munich, Germany.
    24. Taiji Harashima, 2004. "A New Asymptotically Non-Scale Endogenous Growth Model," Development and Comp Systems 0412009, University Library of Munich, Germany, revised 01 Mar 2005.
    25. Palivos, Theodore, 2001. "Social norms, fertility and economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1919-1934, December.

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    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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