The paper examines the interactions between economic integration and population agglomeration in a middle product economy displaying neoclassical growth. There are two vertically integrated economies. Each consists of a large number of final good competitive firms operating plants in both regions, and a large number of intermediate goods monopolistically competitive firms operating each in only...

We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic gro...

The paper assumes a continuum of two period-lived agents; agents are identical except for the inherited income. Young agents optimally allocate their inherited income between consumption and investment in human capital in a stochastic environment. In the second period they receive a wage proportional to the accumulated human capital and invest in o®spring. Two main results are provided: a low e...

Using 1959—1991 growth rates for 449 4-digit US manufacturing industries, I test ‘idea’ and ‘rival human capital’ models of endogenous growth. I find the following: First, TFP growth is faster in industries that are more intensive in capital and intermediate goods and less intensive in labor, favoring idea models over rival human capital models. Second, industries with rapidly declining prices ...

We examine the efficiency of conservation of a renewable resource whose natural productivity is influenced by random environmental disturbances. We allow for non-concave biological production and stock-dependent social welfare. Unlike deterministic models, conservation may be inefficient no matter how productive the resource growth function is. In addition, improvements in the natural productiv...

This paper investigates the relevance of government purchasing behavior for innovationbased economic growth. We construct a parsimonious Schumpeterian growth model in which demand from the public sphere can effectively alter the economy’s rate of technological change. We incorporate results of various empirical studies arguing that public sector demand acts as incentive for private innovation a...

We present an overlapping generations model with endogenous growth in which children inherit from the previous generation human capital and life standard aspirations. Adults evaluate their own consumption with respect to a baseline requirement which depends on their parents past consumption. The presence of bequeathed tastes changes signi cantly the dynamic properties of the model. First, start...

The traditional view of growth and fluctuations implies that aggregate demand shocks result in only transitory departures from trend or “normal” output, which is determined exclusively by aggregate supply factors. Using a simple dynamic framework for a less-developed economy, a series of models is developed to show that aggregate demand can have a permanent effect on economic growth. It is show...

The purpose of this article is to identify the role of population size, population growth and population ageing in models of endogenous economic growth. While in exogenous growth models demographic variables are linked to economic prosperity mainly via the population size, the structure of the workforce, and the capital intensity of workers, endogenous growth models and their successors also al...