Showing papers by "Peter Howitt published in 1997"

Endogenous Growth Theory

Abstract: Advanced economies have experienced a tremendous increase in material well-being since the industrial revolution. Modern innovations such as personal computers, laser surgery, jet airplanes, and satellite communication have made us rich and transformed the way we live and work. But technological change has also brought with it a variety of social problems. It has been blamed at various times for increasing wage and income inequality, unemployment, obsolescence of physical and human capital, environmental deterioration, and prolonged recessions. To understand the contradictory effects of technological change on the economy, one must delve into structural details of the innovation process to analyze how laws, institutions, customs, and regulations affect peoples' incentive and ability to create new knowledge and profit from it. To show how this can be done, Philippe Aghion and Peter Howitt make use of Schumpeter's concept of creative destruction, the competitive process whereby entrepreneurs constantly seek new ideas that will render their rivals' ideas obsolete. Whereas other books on endogenous growth stress a particular aspect, such as trade or convergence, this book provides a comprehensive survey of the theoretical and empirical debates raised by modern growth theory. It develops a powerful engine of analysis that sheds light not only on economic growth per se, but on the many other phenomena that interact with growth, such as inequality, unemployment, capital accumulation, education, competition, natural resources, international trade, economic cycles, and public policy.

Endogenous growth theory

Abstract: Advanced economies have experienced a tremendous increase in material well- being since the industrial revolution. Modern innovations such as personal computers, laser surgery, jet airplanes, and satellite communication have made us rich and transformed the way we live and work. But technological change has also brought with it a variety of social problems. It has been blamed at various times for increasing wage and income inequality, unemployment, obsolescence of physical and human capital, environmental deterioration, and prolonged recessions. To understand the contradictory effects of technological change on the economy, one must delve into structural details of the innovation process to analyze how laws, institutions, customs, and regulations affect peoples' incentive and ability to create new knowledge and profit from it. To show how this can be done, Philippe Aghion and Peter Howitt make use of Schumpeter's concept of creative destruction, the competitive process whereby entrepreneurs constantly seek new ideas that will render their rivals' ideas obsolete. Whereas other books on endogenous growth stress a particular aspect, such as trade or convergence, this book provides a comprehensive survey of the theoretical and empirical debates raised by modern growth theory. It develops a powerful engine of analysis that sheds light not only on economic growth per se, but on the many other phenomena that interact with growth, such as inequality, unemployment, capital accumulation, education, competition, natural resources, international trade, economic cycles, and public policy.

Economic Growth, Technological Change, and Canadian Economic Policy

Abstract: Sustained, technology-led boom will follow current economic stress in Western countries if past is any guide, says economist Richard Lipsey The economic disorder that Western countries have experienced in the past two decades is being driven by the introduction of major changes in information and communication technology , economist Richard G. Lipsey said today in a lecture delivered in Vancouver. Such upheaval is a transitional phase typically associated with the introduction of any new, pervasive technology, Lipsey said, and if the past is any guide, it should be followed by a period of sustained boom within a more stable economic structure, beginning around the start of the next millennium and lasting for decades. Lipsey, who is a Fellow of the Canadian Institute for Advanced Research and Professor of Economics at Simon Fraser University, made his remarks in a lecture entitled Economic Growth, Technological Change, and Canadian Economic Policy, the fifth in the C.D. Howe Institute's annual Benefactors Lecture series. Lipsey concedes that many people are confused and apprehensive about the massive economic changes that have taken place in the past 20 years. Yet, he argues, such changes are part of a necessary process of deep structural adjustment across the whole economy, and are being driven by forces too fundamental to be stopped. To try to do so, he says, would be as unproductive as was the Luddite resistance against the introduction of labor-saving textile machinery in early nineteenth-century England. It may be possible to design policies to shape these fundamental historical changes at the margin and to lessen some of their more undesirable consequences, Lipsey argues, but Canadians should understand that such policies can be only limited in scope, and their effects over the decades would be fairly trivial compared to what can be accomplished by sustained economic growth. Lipsey dramatizes the benefits of long-term economic growth by noting that, since 1896, relative purchasing power has increased tenfold. Moreover, this vastly increased value of consumption has come about not by producing ten times as many products and services as the late Victorian economy did, but by the introduction of wholly new commodities with technologies that were unknown a century ago. In other words, Lipsey says, technological advance not only raises incomes; it transforms people's lives by permitting the invention of new things and allowing the manufacture of them in new ways. In response to those who maintain that sustained economic …