Knowledge And Growth

Economic growth is the term economists use to describe the growth in output from an economy. Beginning with the seminal work of Romer (1986), The relations between knowledge and economic growth have been the major topic of macroeconomics since mid of 1980's. It is beyond the scope of this paper to present an exhaustive discussion of growth theory. The aim of this paper is to explain how economists try to understand the relations of economic growth and knowledge. To make the task manageable, the focus is on major issues and the models of endogenous growth which include knowledge. The paper is organized as follows. We introduce the developing of endogenous growth theory from view of the knowledge and growth in section. We begin our discussion in Section 2 by expositing the definition and the nature of knowledge in economics In section 3,we set out some basic generic models and show how it yields some key models that have played a prominent role in the recent literature on economic growth models based knowledge. The base of these models is that knowledge has the nature of non-rival and partly non-exclude. The first generation endogenous growth models discussed in section 3 didn't consider the. The Neo-Schumpeterian growth models discussed in section 4, which represent developing of the endogenous growth models in future, base on the effect of creative destroy. In these models, growth is primarily driven by a sequence of quality-improving innovations each of which destroys the rents generated by previous innovations.The initial models discussed in section 3 and section 4 had the characteristic that the economy has scale effect. This is clearly a limitation. Criticisms of these endogenous growth models have led to the development of the non-scale model. Section 5 discusses the non-scale models. The advantage of such models is that they are consistent with the experiments research. From this standpoint, non-scale growth models should be viewed as being the norm, rather than the exception. In this view of point, these models are in many aspects a hybrid of endogenous and neoclassical models.In the endogenous growth models, the incentive of innovations is the monopoly rent of innovation. The models of market structure and endogenous growth provide important insights into this relationship. In section 6, we research this kind of models. Some important issues about knowledge and growth is researched in the rest of the paper. In section 8 the endogenous growth models including multiple balanced growth equilibria and indeterminacy is discussed. In section 9, the endogenous growth models including knowledge spillovers. In section 10, the endogenous growth models including general purpose technologies (GPTs). In section 11, the policy issue of the knowledge and endogenous growth models.In section 12, the author reviewed briefly the knowledge-based endogenous growth models.