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Uncertainty-driven growth

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  • Oikawa, Koki

Abstract

In this paper, I present a model in which firm-level uncertainty raises aggregate productivity growth. The mechanism for this is learning-by-doing in the research sector: firms undertake research to reduce uncertainty, which results in social knowledge accumulation that improves the productivity of future research. The model explains the positive correlation between TFP growth and dispersion in manufacturing industries.

Suggested Citation

  • Oikawa, Koki, 2010. "Uncertainty-driven growth," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 897-912, May.
    • Handle: RePEc:eee:dyncon:v:34:y:2010:i:5:p:897-912
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    2. Mahadevan, Renuka & Suardi, Sandy, 2011. "The effects of uncertainty dynamics on exports, imports and productivity growth," Journal of Asian Economics, Elsevier, vol. 22(2), pages 174-188, April.
    3. Radhika Lahiri & Zivanemoyo Chinzara, 2022. "Institutional reform, technology adoption and redistribution: a political economy perspective," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(2), pages 361-400, August.
    4. HOSONO Kaoru & TAKIZAWA Miho & YAMANOUCHI Kenta, 2017. "Competition, Uncertainty, and Misallocation," Discussion papers 17071, Research Institute of Economy, Trade and Industry (RIETI).
    5. Boyan Jovanovic & Sai Ma, 2023. "Growth through learning," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 211-234, October.
    6. Boyan Jovanovic & Chung-Yi Tse, 2006. "Creative Destruction in Industries," NBER Working Papers 12520, National Bureau of Economic Research, Inc.
    7. Oikawa, Koki, 2016. "A microfoundation for stochastic frontier analysis," Economics Letters, Elsevier, vol. 139(C), pages 15-17.
    8. Michael Jetter, 2013. "Volatility and Growth: An Explanation for the Disagreement," Documentos de Trabajo de Valor Público 10944, Universidad EAFIT.
    9. Jetter, Michael, 2014. "Volatility and growth: Governments are key," European Journal of Political Economy, Elsevier, vol. 36(C), pages 71-88.

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