Technical progress as a Spillover

Dipankar Dasgupta

in Modern Growth Theory

Published in print November 2010 | ISBN: 9780198069966
Published online October 2012 | e-ISBN: 9780199080458 | DOI:
Technical progress as a Spillover

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Technical progress may be viewed as the conscious result of research and development, or as an unplanned by-product of the process of privately conducted economic activities. This chapter looks at a series of models that avoid the complexities of alternative market structures. Except for the model of Romer (1986), the models have technical similarities. First, the chapter examines the notion of technical progress as a spillover or externality. It then discusses the learning by doing hypothesis, which views technical progress as an improvement in workers’ skills caused by exposure to capital resulting from continuing investment activity. It also explores command economy and private economy, as well as growth paths of capital and labour. Finally, the chapter considers the simplest type of endogenous growth model, the AK model, and shows how it is linked to the fixed coefficients model.

Keywords: AK model; technical progress; spillover; externality; learning by doing hypothesis; investment; labour; capital; command economy; private economy

Chapter.  11867 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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