New Growth Theory, Technology and Learning: A Practitioner's Guide. Reviews ofEconomic Development Literature and Practice: No. 4

摘要

New Growth Theory emphasizes that economic growth results from the increasingreturns associated with new knowledge. Knowledge has different properties from other economic goods. The ability to grow the economy by increasing knowledge rather than labor and capital creates opportunities for nearly boundless growth. Markets fail to produce enough knowledge because innovators cannot capture all of the gains associated with creating new knowledge. And because knowledge can be infinitely reused at zero marginal cost, firms that use knowledge in production can earn quasi-monopoly profits. Economies with widespread increasing returns are unlikely to develop along a unique equilibrium path. Development may be a process of creative destruction, with a succession of monopolistically competitive technologies and firms. Markets alone may not converge on a single most efficient solution, and technological and regional development will tend to exhibit path dependence. History, institutions, and geography all shape the development of knowledge-based economies: New Growth Theory, and the increasing returns associated with knowledge have many implications for economic development policy. New Growth Theory underscores the importance of investing in new knowledge creation to sustain growth. Policy makers will need to pay careful attention to all of the factors that provide incentives for knowledge creation (e.g., research and development, the education system, and entrepreneurship).