EconPapers    
Economics at your fingertips  
 

Internal Increasing Returns to Scale and Economic Growth

John List () and Haiwen Zhou ()

No 336, NBER Technical Working Papers from National Bureau of Economic Research, Inc

Abstract: This study develops a model of endogenous growth based on increasing returns due to firms' technology choices. Particular attention is paid to the implications of these choices, combined with the substitution of capital for labor, on economic growth in a general equilibrium model in which the R&D sector produces machines to be used for the sector producing final goods. We show that incorporating oligopolistic competition in the sector producing finals goods into a general equilibrium model with endogenous technology choice is tractable, and we explore the equilibrium path analytically. The model illustrates a novel manner in which sustained per capita growth of consumption can be achieved?through continuous adoption of new technologies featuring the substitution between capital and labor. Further insights of the model are that during the growth process, the size of firms producing final goods increases over time, the real interest rate is constant, and the real wage rate increases over time.

JEL-codes: E10 E22 O41 (search for similar items in EconPapers)
Date: 2007-03
Note: EFG TWP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/t0336.pdf (application/pdf)

Related works:
Working Paper: Internal Increasing Returns to Scale and Economic Growth (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberte:0336

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/t0336

Access Statistics for this paper

More papers in NBER Technical Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-06-25
Handle: RePEc:nbr:nberte:0336