The Role of Knowledge and Capital in Economic Growth

Sergio Rebelo ()

Research Paper from World Institute for Development Economics Research

Abstract: Starting from the celebrated neoclassical (Solow) model of economic growth, this paper discusses new ideas in growth theory focussing on how to make sustained growth feasible. It first reviews models that broadened the notion of capital to include human capital and the state of technology. These extensions of the neoclassical theory are not very satisfying at a descriptive level because productivity growth is associated with either human or physical capital accumulation in a way that does not interact with the invention of new technologies. The paper surveys models which make techn ological progress endogenous by allowing firms to undertake investment aimed either at producing new goods or at developing new production methods. Economic growth is shown to depend positively on the size of the market.

Keywords: TECHNOLOGY; ECONOMIC GROWTH (search for similar items in EconPapers)
JEL-codes: O32 O33 O41 O47 (search for similar items in EconPapers)
Pages: 23 pages
Date: 1998
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:wodeec:149

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