Chapter

A Simple Exposition of Learning by Doing in Endogenous Growth Theory

Dipankar Dasgupta

in Dimensions of Economic Theory and Policy

Published in print October 2011 | ISBN: 9780198073970
Published online September 2012 | e-ISBN: 9780199081615 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198073970.003.0007
A Simple Exposition of Learning by Doing in Endogenous Growth Theory

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This chapter presents a unified framework for understanding the implication of ‘learning by doing’ in endogenous growth models. It considers three different ways in which the concept of ‘learning by doing’ has been exploited by the endogenous growth theory. The seminal work dates back to Kenneth Arrow (1962), who took a significant step towards offering a theory of labour augmentation and attributed productivity increases over time to learning. Arrow showed that technical progress amounts to ‘learning by doing’ and constructed an index for experience consisting of the value of cumulative gross investment at any point of time. Arrow's idea was extended by Antoine d'Autume and Philippe Michel (1993) and by Paul M. Romer (1986), the latter bringing out the importance of education and knowledge capital in determining the growth rates of economies. This chapter makes the three models comparable by utilizing a disembodied technical progress structure.

Keywords: learning by doing; endogenous growth theory; Kenneth Arrow; technical progress; cumulative gross investment; Antoine d'Autume; Philippe Michel; Paul M. Romer; education; knowledge capital

Chapter.  5606 words.  Illustrated.

Subjects: Microeconomics

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