The Rise of the Creative Class

Technology progress bias, industrial structure adjustment, and regional industrial economic growth motivation —— Research on regional industrial transformation and upgrading based on the effect of learning by doing

In this paper, we develop a dynamic control model of a multiproduct monopolist’s product and process innovation with knowledge accumulation resulting from learning by doing. Our work main features have four aspects: (i) the multiproduct monopolist’s instantaneous cost functions of product and process innovation depend on both the corresponding investments and the accumulations of knowledge through learning by doing in product and process innovation activities, respectively; (ii) the change rates of knowledge accumulations of product and process innovation are state variables; (iii) product innovation is understood as a reduction in product substitutability and process innovation as a lowering of marginal production cost; and (iv) monopolist’s inverse demand function depends jointly on the output level for product varieties and product substitutability. Our main objective is to investigate the optimal decision behavior of a multiproduct monopolist investing in product and process innovation with kn...

Dynamic control of a multiproduct monopolist firm’s product and process innovation

We study the impact that the provision of a local public good (LPG) by two cities has on their ability to attract and retain members of the creative class. This creative class consists of two types of members known as engineers and artists. Engineers are wealthier than artists and they also value the LPG more. We first focus on each city in isolation. We compute the marginal value and the marginal cost of the LPG and then determine the provision of this LPG when the provision is determined by uniform contributions and majority voting. Next, we allow the creative class members to migrate between the two cities and analyze whether engineers or artists migrate, the equilibrium distribution of the creative class, and the efficiency of the LPG provision. Finally, we consider the situation in each city just before migration and study how much of the LPG is provided when proportional contributions and majority voting determine this provision. A related question we address is whether engineers or artists now have an incentive to migrate and, if yes, we identify who would like to migrate and to which city.

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Using local public goods to attract and retain the creative class: A tale of two cities

Artists, engineers, and aspects of economic growth in a creative region

We study the effects of learning by doing resulting from the production of a final good on economic growth in a region that is creative in the sense of Richard Florida. Firms in this region use creative and physical capital to produce output. We model learning by doing formally and our analysis of the working of this creative region leads to four results. First, we derive analytic expressions for the growth rates of physical capital and technology. Second, we draw phase diagrams and show that in the steady state, the preceding two growth rates must be equal. Third, we show that the economy of our creative region converges to a balanced growth path (BGP) in which the growth rates of physical capital, technology, and the output of the final good are identical. Finally, we investigate the impact that an increase in the savings rate has on the economic growth of our creative region in the long run.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2410493_code61439.pdf?abstractid=2410493&mirid=1

Umer Usman

Papers

Goods Production, Learning by Doing, and Growth in a Region with Creative and Physical Capital

Goods production, learning by doing, and growth in a region with creative and physical capital ☆