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Unemployment, Growth, and Complementarities between Innovation and Knowledge Diffusion

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  • Hetze, Pascal

Abstract

This paper analyzes the relationship between endogenous growth and unemployment. It provides knowledge diffusion as the link between innovation-based growth through creative destruction and the labor market outcome. Three dimensions of knowledge are considered: human capital (general skills), know-how gained through learning-byusing, and codified knowledge accumulated by research activities. Output growth is driven by innovations. However, the implementation of technological progress into a vintage-type production process requires the know-how that is only acquirable by the diffusion of knowledge through learning-by-using. A mutual feedback between research and the employment level thus arises, based on the complementary relationship between the input of labor in R&D and manufacturing. Inadequate knowledge diffusion causes limited growth and mismatch unemployment.

Suggested Citation

  • Hetze, Pascal, 2002. "Unemployment, Growth, and Complementarities between Innovation and Knowledge Diffusion," Thuenen-Series of Applied Economic Theory 32, University of Rostock, Institute of Economics.
    • Handle: RePEc:zbw:roswps:32
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    More about this item

    Keywords

    mismatch unemployment; innovation-based growth; knowledge diffusion;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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