Knowledge-based growth

Scott Freeman, Stephen Polasky

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

This paper presents a model displaying sustained growth in output resulting from the accumulation of knowledge. The accumulation of knowledge is endogenous, determined by a level of study chosen by optimizing agents. Although knowledge can be owned and sold, its equilibrium price is below its value to future production, implying that the equilibrium suffers from a Paretononoptimal underaccumulation of knowledge. These features of the equilibrium result from two special properties of knowledge: (i) an agent's stock of knowledge is undiminished by the transmission of that knowledge to someone else and (ii) the transmission of knowledge cannot be fully observed.

Original languageEnglish (US)
Pages (from-to)3-24
Number of pages22
JournalJournal of Monetary Economics
Volume30
Issue number1
DOIs
StatePublished - Oct 1992

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