NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Endogenous Technological Change

Paul Romer

NBER Working Paper No. 3210 (Also Reprint No. r1485)
Issued in December 1989
NBER Program(s):   EFG   ITI   IFM

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, and instead, the equilibriumis 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.

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Document Object Identifier (DOI): 10.3386/w3210

Published: Journal of Political Economy, Vol. 98, No. 5, Part 2, pp. S71-S102, (1990). citation courtesy of

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