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The dynamics of knowledge diversity and economic growth

Marcus Berliant () and Masahisa Fujita

MPRA Paper from University Library of Munich, Germany

Abstract: How is long run economic growth related to the endogenous diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous R & D workers, embedded in a growth model to address this question. In contrast with the traditional literature, in our model the composition of the research work force in terms of knowledge heterogeneity matters, in addition to its size, in determining the production of new knowledge. Moreover, the heterogeneity of the work force is endogenous. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. Knowledge in common is required for communication, but differential knowledge is useful to bring originality to the endeavor. Whether or not the system reaches the most productive state depends on the strength of the public knowledge transmission technology. Equilibrium paths are found analytically. Long run economic growth is positively related to both the effectiveness of pairwise R & D worker interaction and to the effectiveness of public knowledge transmission.

Keywords: knowledge creation; knowledge externalities; microfoundations of endogenous growth; knowledge diversity and growth (search for similar items in EconPapers)
JEL-codes: D90 D83 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-knm
Date: 2009-07-27
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Related works:
Journal Article: The Dynamics of Knowledge Diversity and Economic Growth (2011) Downloads
Working Paper: The Dynamics of Knowledge Diversity and Economic Growth (2010) Downloads
Working Paper: The Dynamics of Knowledge Diversity and Economic Growth (2010) Downloads
Working Paper: The Dynamics of Knowledge Diversity and Economic Growth (2008) Downloads
Working Paper: The dynamics of knowledge diversity and economic growth (2008) Downloads
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