Formal definitions of information and knowledge and their role in growth through structural change

Martin Hilbert

Structural Change and Economic Dynamics, 2016, vol. 38, issue C, 69-82

Abstract: The article provides a way to quantify the role of information and knowledge in growth through structural adjustments. The more is known about environmental patterns, the more growth can be obtained by redistributing resources accordingly among the evolving sectors (e.g. bet-hedging). Formal equations show that the amount of information about the environmental pattern is directly linked to the growth potential. This can be quantified by treating both information and knowledge formally through metrics like Shannon's mutual information and algorithmic Kolmogorov complexity from information theory and computer science. These mathematical metrics emerge naturally from our evolutionary equations. As such, information becomes a quantifiable ingredient of growth. The policy mechanism to convert information and knowledge into growth is structural adjustment. The presented approach is applied to the empirical case of U.S. export to showcase how information converts into growth potential.

Keywords: Evolutionary growth; Information; International trade; Bet hedging; Fitness decomposition; Knowledge (search for similar items in EconPapers)
JEL-codes: B25 B52 C02 D80 D81 D92 F14 G11 O43 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X16300017
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:38:y:2016:i:c:p:69-82

DOI: 10.1016/j.strueco.2016.03.004

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().