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The Dynamics of Knowledge Diversity and Economic Growth
Author(s) -
Berliant Marcus,
Fujita Masahisa
Publication year - 2011
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/0038-4038-77.4.856
Subject(s) - pairwise comparison , diversity (politics) , endogenous growth theory , work (physics) , economics , transmission (telecommunications) , production (economics) , microeconomics , public economics , business , economic growth , human capital , computer science , engineering , political science , mechanical engineering , telecommunications , artificial intelligence , law
How is long run economic growth related to the endogenous diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous research and development (R&D) workers, embedded in a growth model to address this question. The composition of the research work force in terms of knowledge heterogeneity, in addition to its size, matters in determining the production of new knowledge. Moreover, the heterogeneity of the work force is endogenous. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. Whether or not the system reaches the most productive state depends on the strength of the public knowledge transmission technology. Long run economic growth is positively related to both the effectiveness of pairwise R&D worker interaction and to the effectiveness of public knowledge transmission.