Endogenous Technological Change

1990/10/01 by Paul M. Romer, Paul Romer · 117 citations
Economics, Econometrics and Finance · #Economic theories and models

paper · doi:10.1086/261725

Abstract

Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

Cited by

• How does foreign direct investment affect economic growth?
• Fiscal Policy, Consumption Risk, and Stock Returns: Evidence from U.S. States
• Political Activism and Firm Innovation
• Data and the Aggregate Economy
• Managing Technological, Sociopolitical, and Institutional Change in the New Normal
• The Context of Entrepreneurial Judgment: Organizations, Markets, and Institutions
• Capital Is Not Enough: Innovation in Developing Economies
• The economic impact of open science: a scoping review
• Production Networks and Innovation in the Semi-periphery: The Transition to Electric Vehicles in South Korea and Spain
• Plural values of nature help to understand contested pathways to sustainability
• Does network infrastructure construction reduce energy intensity? Based on the “Broadband China” strategy
• Technological Innovation, Resource Allocation, and Growth*
• Imported Intermediate Inputs and Domestic Product Growth: Evidence from India
• Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects
• Growth Through Inter-sectoral Knowledge Linkages
• The Global Race for Talent: Brain Drain, Knowledge Transfer, and Growth
• The long-term evolution of technological complexity and its relationship with economic growth
• Social Cohesion and Economic Growth: An Empirical Investigation
• The Geography of Complex Knowledge
• Scaling of Atypical Knowledge Combinations in American Metropolitan Areas from 1836 to 2010
• The effects of R&D tax credits on patenting and innovations
• R&D and non-linear productivity growth
• Regional “Worlds” of Production: Learning and Innovation in the Technology Districts of France, Italy and the USA
• Natural language processing to identify the creation and impact of new technologies in patent text: Code, data, and new measures
• Technology upgrading of middle income economies: A new approach and results
• The March of the Techies: Job Polarization Within and Between Firms
• Universities as a Source of Commercial Technology: A Detailed Analysis of University Patenting, 1965–1988
• Local Geographic Spillovers between University Research and High Technology Innovations
• Child Care and Human Development: Insights from Jewish History in Central and Eastern Europe, 1500–1930*
• Country-level differences in socio-economic development and cultural dimensions are associated with workers’ economic expectations of AI: Evidence from 31 countries
• “Join us in preparing people for tomorrow’s jobs”: Robert Reich, the “New Economy,” and mythic thinking as interventionist knowledge
• Finding Stars: Mapping the Geography of the World's Scientific Elites
• Innovation and Regional Growth in the Enlarged Europe: The Role of Local Innovative Capabilities, Peripherality, and Education
• Have R&D Spillovers Declined in the 21^st Century?
• Artificial intelligence, firm growth, and product innovation
• Measuring and explaining government efficiency in developing countries
• Human Capital Investment: The Returns from Education and Training to the Individual, the Firm and the Economy
• The complementary role of human capital in innovation-driven decarbonization
• Limitations of human capital theory
• Displacement risk and asset returns
• Firm Level Evidence of Disaster Impacts on Growth in Vietnam
• EU-funded investment in Artificial Intelligence and regional specialization
• Perspectives on Growth Theory
• Institutions and the Impact of Investment on Growth
• America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System
• Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences
• An empirical assessment of the role of trade in services in export product diversification in Sub-Saharan Africa
• Knowledge Governance
• Assessing the impact of emissions trading scheme on low-carbon technological innovation: Evidence from China
• The digital entrepreneurial ecosystem
• The evolution of the global digital platform economy: 1971–2021
• Trust and Innovation Within the Firm: Evidence from Matched CEO-Firm Data
• Individualism and the Formation of Human Capital
• Sparking Knowledge: Early Technology Adoption, Innovation Ability and Long-Run Growth
• PUBLIC R&D POLICIES AND PRIVATE R&D INVESTMENT: A SURVEY OF THE EMPIRICAL EVIDENCE
• Henry George, land speculation, and economic growth and transformation
• The Economics of Knowledge and the Knowledge Economy: On the Changing Meaning of Externalities
• The transition to the knowledge economy in advanced capitalist democracies: a new index for comparative research
• Introducing the COW Arms Technology Data, 1816–2023: Structure and Applications
• Understanding UK Productivity Using a Macroeconomic Lens
• Artificial intelligence and productivity: global evidence from AI patent and bibliometric data
• The importance of trade and technology for productivity: An empirical assessment across EU regions
• Information technology, income inequality and economic growth in sub-Saharan African countries
• Does NBPTS Certification Affect the Number of Colleagues a Teacher Helps With Instructional Matters?
• Evolutionary Economic Theories of Sustainable Development
• Aggregate shocks or aggregate information? Costly information and business cycle comovement
• The linear and non-linear impacts of ICT on economic growth, of disaggregate income groups within SSA region
• Highly Educated Immigrants and Native Occupational Choice
• Defining growth dependence
• Understanding and modelling structural economic change as a dynamic resource creation process—an application to low-carbon transitions
• AI on Drugs: Can Artificial Intelligence Accelerate Drug Development? Evidence from a Large-Scale Examination of Bio-Pharma Firms
• Revisiting the growth–inequality nexus in Italian regions: inter-regional inequality and regional traps
• Regional R&D spending, absorptive capacity and the regional innovation paradox
• The economics of negative population growth: global to local perspectives
• Digital Economy, Industrial Structure Optimization, and Agricultural Green Development Efficiency: A Double Machine Learning Causal Analysis
• How institutions shape the economic returns to investment in European regions?
• Anatomy of Green Specialisation: Evidence from EU Production Data, 1995–2015
• The impact of innovation policy on the regional economies of Europe
• The Political Economics of Green Transitions
• Using structural diversity to measure the complexity of technologies
• Reformulating the Critique of Human Capital Theory
• The Burden of Knowledge and the “Death of the Renaissance Man”: Is Innovation Getting Harder?
• The Legacy of COVID-19 in Education
• Clean innovation, heterogeneous financing costs, and the optimal climate policy mix
• Rethinking the Effects of Smart City Implementation on Industrial Structure Change
• Spillover effects of the digital economy on economic growth in Africa
• Monopolistic competition, indeterminacy and growth
• The Women Empowerment and Innovation Nexus: A Global Context
• Trade partner diversification and growth: How trade links matter
• Social trust and productivity: evidence from European NUTS-2 regions
• Population growth, agricultural intensification, induced innovation and natural resource sustainability: An application of neoclassical growth theory
• Heterogeneous impact of innovation on economic development: Evidence from EU regions
• Brain drains and brain gains: causes, consequences, policy
• Public R&D Investments and Private-sector Patenting: Evidence from NIH Funding Rules
• Regional economic impact of university research expenditures
• Climate Change Economics—Bridging the Gap Between Scientific Urgency and Policy Inaction
• Urban scaling and diffusion of knowledge recombination in Chinese cities, 1991–2020
• Relational economics: investing in aged care R&D in Australia
• Intangible assets and imperfections in product and labor markets
• Innovation and social welfare: A new research agenda
• Technology sovereignty as an emerging frame for innovation policy. Defining rationales, ends and means
• Finite-time singularity in the dynamics of the world population, economic and financial indices
• Are Ideas Getting Harder to Find?
• Foreign direct investment, information technology and economic growth dynamics in Sub-Saharan Africa
• Economic growth and broadband access: The European urban-rural digital divide
• Leveraging digital technology for development: Does ICT contribute to poverty reduction?
• Rethinking poverty: An econometric analysis of the role of ICT poverty in a global context
• The nexuses between energy investments, technological innovations, emission taxes, and carbon emissions in China
• ICT and productivity: conclusions from the empirical literature
• North‐South and South‐South trade‐related technology diffusion: an industry‐level analysis of direct and indirect effects
• Climate Change Economics: Bridging the Gap Between Scientific Urgency and Policy Inaction
• When Distance Hurts but Digital Heals: Innovation Paths Under Regional Integration
• Igniting Technological and Non‐Technological Innovation for Economic Performance: Enhancing Results by Investing in Human Capital
• Heterogeneous effects of frontier technology adoption on economic growth in Africa
• Nonlinear environmental impacts of digital transformation in China’s mega-urban agglomerations
• Public-sector financial incentives for business relocation and effectiveness measures based on company profile and geographic zone
• The impact of the EU Industrial R&D Investment Scoreboard on science and policy

Related

• Endogenous growth - A dynamic technology augmentation of the Solow model
• The Origins of Endogenous Growth
• Increasing Returns and Long-Run Growth
• A Model of Growth Through Creative Destruction
• Vintage Human Capital, Growth, and the Diffusion of New Technology