Most of the history of industrialisation in the less developed countries (LDCs) of the capitalist world has been examined under two headings: import‐substituting industrialisation (ISI) and export‐orientated industrialisation (EOI). Some of the most influential authors and policy advisers have been moving rapidly to a position of treating these experiences as closed chapters of development economics. The verdict is that’ ISI has not worked (or only in its early stages) and that EOI under liberal policies has been so successful that LDCs in general should follow this route. Our argument is that ISI has indeed led to substantial (static) inefficiency and foreign exchange problems, but that from a dynamic perspective the analyses are still most unsatisfactory ‐for both conceptual and empirical reasons. Second, we suggest that the alleged superiority of EOI is not so much due to the adoption of more ‘rational’ market‐orientated policies, but due to a combination of cyclical and historical factors and to subst...

Industrialisation strategies in less developed countries: Some lessons of historical experience

Standard R&D growth models have two disturbing properties: the presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's (1998), not only remove the counterfactual scale effect, but also imply that the growth rate does not react to any kind of economic policy. They share a different disturbing property, however: economic growth depends positively on population growth, and the economy cannot grow in the absence of population growth. The present paper integrates human capital accumulation into Segerstrom's (1998) model of growth without scale effects. Consistent with many empirical studies, growth is positively related not to population growth, but to investment in human capital. And there is one way to accelerate growth: subsidizing education.

On the Effectiveness of Growth-Enhancing Policies in a Model of Growth Without Scale Effects

We develop a dynamic general equilibrium model of education, quality and variety innovation, and scale-invariant growth. The early endogenous innovation-based growth models incorporate a scale e?ect predicting that larger economies are characterized by higher per capita growth rates. Recent models of semi-endogenous growth remove this scale e?ect but instead imply that economic growth depends proportionally on population growth. In contrast to the predecessor models, this paper argues that endogenous human-capital accumulation rather than an exogenously given continuing increase of the population is decisive for per capita growth. The consequence of the proposed integration of human capital accumulation into a two-RD quality and variety innovation ; scale-invariant growth

https://www.econstor.eu/bitstream/10419/40323/1/558781209.pdf

Education and innovation as twin-engines of growth

A radical evolution in intellectual property law and practices has followed the rise in importance of new technology industries. Nowadays, many patents directly protect knowledge. To account for this evolution, we construct a simple R&D-based growth model where pieces of knowledge are directly protected by patents. To deal with the nonconvexity property of technologies in which knowledge is an input and show how research can be funded privately, we construct a dynamic general equilibrium with Cournot competition and free entry where knowledge is exchanged on markets that can be subject to imperfect exclusion. Under the assumption of perfect exclusion, we show that research is funded optimally as the distortion caused by the knowledge spillover vanishes when markets are complete. We then argue and demonstrate that insufficient research investments leading to an insufficient level of growth can be explained by the public good nature of knowledge itself, i.e., the problem of imperfect exclusion faced by the sellers of knowledge.

/pdf/pricing-knowledge-and-funding-research-of-new-technology-ntc0b8tdog.pdf

Pricing Knowledge and Funding Research of New Technology Sectors in a Growth Model

The paper presents a dynamic general-equilibrium model of education, quality and variety innovation, and scale-invariant growth We consider endogenous humancapital accumulation in an educational sector and quality and variety innovation in two separate R&D sectors In the balanced growth equilibrium education and innovation appear as in-line engines of growth and government can accelerate growth by subsidizing education or by enhancing the effectiveness of the educational sector

https://www.econstor.eu/bitstream/10419/59596/1/718198743.pdf

Hubert Schmitz

Papers

Trade Unions and the ‘New’ Internationalization of Production

Capital Accumulation and Employment in the Periphery: A Programme of Research