Research and Uncertainty

Dipankar Dasgupta

in Modern Growth Theory

Published in print November 2010 | ISBN: 9780198069966
Published online October 2012 | e-ISBN: 9780199080458 | DOI:
Research and Uncertainty

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This chapter considers an element of randomness in the arrival of ideas and recognizes the fact that older inventions are often made obsolete by the arrival of new ideas which makes economic growth a process of economic destruction. Each new generation of idea presumably arrives with a specified increase in productivity, but the growth is exogenously unknown because the date of arrival of each idea is also unknown. This results in the replacement of a deterministic growth rate by an expected growth rate. This chapter examines the link between uncertainty and obsolescence, the role of labour input in determining the probability of success in research, drastic or non-drastic innovations, growth rate of the command economy, and a quality ladder model introduced by Grossman and Helpman.

Keywords: research; uncertainty; obsolescence; economic growth; innovations; quality ladder model; labour input; ideas; randomness; productivity

Chapter.  9833 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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