Resource title

Entrepreneurial innovation and sustained long-run growth without weak or strong scale effects

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Resource description

R&D-based growth theory suggests that a larger population size raises either the long-run rate of economic growth (strong scale effect) or the level of per capita income (weak scale effect), with far-reaching policy implications. However, for modern times there is little empirical support for strong scale effects and evidence in favor of weak scale effects is mixed, at best. This paper develops a simple overlapping-generations framework with endogenous occupational choice of heterogeneous agents and entrepreneurial innovations in which any form of scale effect is absent. A higher population growth rate has a negligible, possibly negative effect on the long-run growth rate of per capita income. Long-run growth is sustained also in absence of population growth and generally is policy-dependent.

Resource author

Volker Grossmann

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26309

Resource license

Adapt according to the presented license agreement and reference the original author.