From Smith to Schumpeter: A Theory of Take-Off and Convergence to Sustained Growth
Pietro Peretto ()
No 13-10, Working Papers from Duke University, Department of Economics
This paper develops a theory of the emergence of modern innovation-driven Schumpeterian growth. It uses a tractable model that yields a closed-form solution, consisting of an S-shaped (i.e., logistic-like) time path of firm size and a set of equations that express the relevant endogenous variables – GDP, product variety and product quality, consumption, the shares of GDP earned by the factors of production – as functions of firm size. It also obtains closed-form solutions for the dates of the events that drive the economy's phase transitions as functions of the fundamentals. The resulting path of GDP per capita consists of a convex-concave profile replicating the key feature of long-run data: an accelerating phase followed by a deceleration with convergence to a stationary growth rate. Compared to other availables theories, the paper focuses on the within-industry forces that regulate the response of firms and entrepreneurs to Smithian market expansion.
Keywords: Endogenous Growth; Firm Size; Market Structure; Take-off (search for similar items in EconPapers)
JEL-codes: E10 L16 O31 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-ent, nep-fdg, nep-his, nep-hme and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2275363 main text
Journal Article: From Smith to Schumpeter: A theory of take-off and convergence to sustained growth (2015)
Working Paper: From Smith to Schumpeter: A Theory of Take-off and Convergence to Sustained Growth (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:duk:dukeec:13-10
Access Statistics for this paper
More papers in Working Papers from Duke University, Department of Economics Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097.
Bibliographic data for series maintained by Department of Economics Webmaster ().