Knowledge exhaustibility and Schumpeterian growth
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This paper accommodates the new understanding of the limited exhaustibility of knowledge into the Schumpeterian frame of the creative response to articulate a comprehensive model of Schumpeterian growth. The limited exhaustibility of knowledge and its transient appropriability favor the accumulation of a stock of quasi-public knowledge. The increasing stock of quasi-public knowledge together with appropriate knowledge governance conditions account for the secular decline of knowledge costs and the increase of diachronic and pecuniary knowledge externalities. Because of its limited exhaustibility and the consequent accumulability, knowledge is an endogenous endowment that accounts for growth. Unexpected out-of-equilibrium conditions in product and factor markets stir the response of firms. The availability of knowledge externalities accounts for the rate of innovation as they help making the reaction creative so as to enable the introduction of innovations. The search for technological congruence and the secular decline of the cost of technological knowledge accounts for its knowledge intensive direction as it induces the introduction of biased technological changes that augment the output elasticity of knowledge as an input. The limited exhaustibility of knowledge accounts for the secular trend towards the knowledge economy.
KeywordsKnowledge limited exhaustibility and cumulability Knowledge as an endogenous endowment Diachronic knowledge externalities Knowledge costs Schumpeterian creative response Induced technological change Technological congruence
The comments of Christophe Feder and Laura Abrardi to preliminary versions are gratefully acknowledged, as well as the funding of the Collegio Carlo Alberto (F/2017).
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