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Non-exponential growth theory

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  • Ryo HORII

Abstract

To explain the observed stability in real GDP growth, endogenous growth theories typically need a knife-edge degree of externality, which is not supported by microlevel observations.We develop a model where a constant number of new goods are introduced per unit of time and focus on the movement of prices and quantities after introduction.In this environment, positive real GDP growth, as measured by SNA statistics, does not necessarily mean exponential growth in the quantity, quality, or variety of final outputs. We derive the conditions under which measured growth can be sustained, which are less restrictive than typical knife-edge assumptions.

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  • Ryo HORII, 2024. "Non-exponential growth theory," CIGS Working Paper Series 24-018E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:24-018e
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    References listed on IDEAS

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    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Zvi Griliches, 1998. "R&D and Productivity: The Econometric Evidence," NBER Books, National Bureau of Economic Research, Inc, number gril98-1, February.
    3. Klenow, Peter J. & Rodriguez-Clare, Andres, 2005. "Externalities and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 11, pages 817-861, Elsevier.
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