(This abstract was borrowed from another version of this item.)"> (This abstract was borrowed from another version of this item.)">
[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v80y1990i2p97-103.html
   My bibliography  Save this article

Are Nonconvexities Important for Understanding Growth?

Author

Listed:
  • Romer, Paul M
Abstract
Everyday experience and a simple logical argument show that nonconvexities are essential for understanding growth. Compared to previous statements of this well known argument, the presentation here places more emphasis on the distinction between two of the fundamental attributes of any economic good: rivalry and excludability. It also emphasizes the difference between public goods and the technological advances that are fundamental to economic growth. Like public goods, technological advances are rionrival goods. Hence, they are inextricably linked to nonconvexities. But in contrast to public goods, which are nonexcludable, technological advances generate benefits that are at least partially excludable. Hence, innovations in the technology are for the most part privately provided. This means that nonconvexities are relevant for goods that trade in private markets. Consequently, an equilibrium with price-taking in all markets cannot be sustained. Concluding remarks describe some of the recent equilibrium growth models that do not rely on price-taking and highlight some of the implications of these models.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Romer, Paul M, 1990. "Are Nonconvexities Important for Understanding Growth?," American Economic Review, American Economic Association, vol. 80(2), pages 97-103, May.
    • Handle: RePEc:aea:aecrev:v:80:y:1990:i:2:p:97-103
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0002-8282%28199005%2980%3A2%3C97%3AANIFUG%3E2.0.CO%3B2-I&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders and Product Cycles," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 557-586.
    2. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "International Trade with Endogenous Technological Change," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 2, pages 33-70, World Scientific Publishing Co. Pte. Ltd..
    3. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    4. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
    5. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
    6. Grossman, Gene M. & Helpman, Elhanan, 1989. "Growth and Welfare in a Small Open Economy," Foerder Institute for Economic Research Working Papers 275466, Tel-Aviv University > Foerder Institute for Economic Research.
    7. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-1091, December.
    10. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Saïd Hanchane & Abdouni Abdeljabbar, 2004. "La dynamique de la croissance économique et de l'ouverture dans les pays en voie de développement : quelques investigations empiriques à partir des données de Panel," Working Papers halshs-00083720, HAL.
    2. Badibanga, Thaddee Mutumba & Diao, Xinshen & Roe, Terry L. & Somwaru, Agapi, 2008. "Dynamics of Structural Transformation: Understanding the Key Factors That Drive Innovative Activities in Selected Asian and African Countries," Bulletins 43890, University of Minnesota, Economic Development Center.
    3. Stadler, Manfred, 2015. "Innovation, industrial dynamics and economic growth," University of Tübingen Working Papers in Business and Economics 84, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    4. Badibanga, Thaddee & Diao, Xinshen & Roe, Terry & Somwaru, Agapi, 2009. "Dynamics of structural transformation: An empirical characterization in the case of China, Malaysia, and Ghana," IFPRI discussion papers 856, International Food Policy Research Institute (IFPRI).
    5. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    6. Ang, James B., 2009. "CO2 emissions, research and technology transfer in China," Ecological Economics, Elsevier, vol. 68(10), pages 2658-2665, August.
    7. Xavier Sala-i-Martin, 1990. "Lecture Notes on Economic Growth(II): Five Prototype Models of Endogenous Growth," NBER Working Papers 3564, National Bureau of Economic Research, Inc.
    8. Hénock Muanza Katuala, 2020. "Intraregional Openness and Dynamics of outgoing growth [Ouverture intra-régionale et Dynamique de la croissance extravertie]," Working Papers hal-02540689, HAL.
    9. Angus C. Chu, 2024. "Macroeconomic effects of intellectual property rights: an updated survey," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 2, pages 13-26, Edward Elgar Publishing.
    10. Angus Chu & Guido Cozzi & Yuichi Furukawa, 2015. "Effects of Economic Development in China on Skill-Biased Technical Change in the US," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(2), pages 227-242, April.
    11. Sala-i-Martin, Xavier, 1990. "Lecture Notes on Economic Growth: Five Prototype Models of Endogenous Growth. Volume II," Center Discussion Papers 321324, Yale University, Economic Growth Center.
    12. Angus C. Chu, 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," IEAS Working Paper : academic research 09-A007, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    13. Hung‐Ju Chen, 2018. "Innovation, FDI, and the long‐run effects of monetary policy," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1101-1129, November.
    14. Chen, Hung-Ju, 2019. "Innovation and FDI: Does the Target of Intellectual Property Rights Matter?," MPRA Paper 94692, University Library of Munich, Germany.
    15. Dutta, Prajit K & Lach, Saul & Rustichini, Aldo, 1995. "Better Late Than Early: Vertical Differentiation in the Adoption of a New Technology," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 563-589, Winter.
    16. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders and Product Cycles," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 557-586.
    17. Elias Dinopoulos & Constantinos Syropoulos, 2004. "Globalization, Factor Endowments and Scale-Invariant Growth," DEGIT Conference Papers c009_009, DEGIT, Dynamics, Economic Growth, and International Trade.
    18. Segerstrom, Paul S, 2000. "The Long-Run Growth Effects of R&D Subsidies," Journal of Economic Growth, Springer, vol. 5(3), pages 277-305, September.
    19. Chu, Angus C., 2012. "Global Poverty Reduction And Pareto-Improving Redistribution," Macroeconomic Dynamics, Cambridge University Press, vol. 16(4), pages 605-624, September.
    20. Jones, Larry E. & Manuelli, Rodolfo E., 1997. "The sources of growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 75-114, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:80:y:1990:i:2:p:97-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.