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Growth Theoretical Aspects

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Knowledge as a Driver of Regional Growth in the Russian Federation

Abstract

In the fourth chapter the aspects of economic theory that are used to motivate the relation between knowledge and economic performance on the one hand and the in some way clustered structure of Russian industrial but especially innovative activities.While the motivation starts with the neoclassical growth model it is accompanied by select models from new endogenous growth theory like the Ramsey-Cass-Koopmans, the Romer or the Lucas Model. Arrow approach to learning-by-doing is presented as a theoretical example how tacit knowledge can growth on its own in a firm.The Aghion-Howitt and the Ricardo-Pasinetti Model are presented to generate a link between the new growth theory and on the one hand to classical economics (Ricardo-Pasinetti) and on the other hand evolutionary economics (Aghion-Howitt).In the same way the chapter continues by stating the basic idea of evolutionary economics and growth theory and relating the ideas of Schumpeter to evolutionary economics, closing with specific evolutionary growth models.The cluster structure of the Russian Federation is motivated especially by the theory growth poles by Perroux as well as the basic ideas of new economic geography by Krugman.

Without continual growth and progress, such words as improvement, achievement, and success have no meaning. Benjamin Franklin

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Notes

  1. 1.

    See Solow (1956) and Swan (1956).

  2. 2.

    The model is based on the works of Ramsey (1928), Cass (1965) and Koopmans (1965). For the combined model see for example Bretschger (1999).

  3. 3.

    See Rebelo (1991).

  4. 4.

    See Uzawa (1965).

  5. 5.

    See Lucas (1988).

  6. 6.

    See Romer (1986) and Romer (1990).

  7. 7.

    See Aghion and Howitt (2009).

  8. 8.

    See Arrow (1962).

  9. 9.

    See Pasinetti (1960).

  10. 10.

    See Posner (1961), Abramovitz (1986) or Fagerberg (1988).

  11. 11.

    The presentation of the model follows Welfens (2012).

  12. 12.

    The sub-index t denotes the time period.

  13. 13.

    See Inada (1963).

  14. 14.

    Note that f′(k′ t ) does not denote the first derivative of the function but rather its formulation in efficiency units.

  15. 15.

    The importance of analyzing the Solow residual is already considered after the perception of the model itself by Solow (1957), Borts and Stein (1965) or Richardson (1973b).

  16. 16.

    While the model itself is based on the works by Ramsey (1928), Cass (1965) and Koopmans (1965), the representation used here is strongly influenced by its presentation in Bretschger (2004), Steger (2012b) and Carroll (2012b).

  17. 17.

    Following the assumption that GDP is generated as the sum of labor and capital income.

  18. 18.

    Note, \(g_{\mathit{AL}} = g_{A} = x\) is the growth rate of technological knowledge

  19. 19.

    See Arrow (1962).

  20. 20.

    See Verdoorn (1956), p. 434.

  21. 21.

    See Lundberg (1961).

  22. 22.

    The presentation of this section orients itself on the presentation in Carroll (2012d)

  23. 23.

    The model in the form presented here is based on Rebelo (1991), whereas the presentation orients itself in part on Steger (2012a) and Carroll (2012c).

  24. 24.

    The structure of this section orients itself on the presentation of the Lucas model in Carroll (2012a).

  25. 25.

    The model is taken mostly from pages 85 to 99.

  26. 26.

    It is implicitly assumed that output generated is again used to perform research and development.

  27. 27.

    See Pasinetti (1960).

  28. 28.

    See Ricardo (1817).

  29. 29.

    The foundation of evolutionary economics can therefore be traced back to Charles Darwin and his treatise on evolution. See for this Darwin (1859).

  30. 30.

    Note that due to the predictability of political decisions they are only partially interpretable as mutation in the above sense.

  31. 31.

    For example Metcalfe (1998) sees competition as an evolutionary concept – especially in the context of Schumpeter’s ideas on economics, which are discussed in the next section.

  32. 32.

    An overview over Schumpeter’s contributions is given by Arena and Dangel-Hagnauer (2002).

  33. 33.

    Andersen (2009) reports on similarities between the economic ideas of Schumpeter and evolutionary economics.

  34. 34.

    See Schumpeter (1911).

  35. 35.

    See Sect. 3.4.

  36. 36.

    See Saxenian (1991) and Saxenian (1994).

  37. 37.

    See Schumpeter (1946).

  38. 38.

    See Schumpeter (1911).

  39. 39.

    See Darwin (1859).

  40. 40.

    See Nelson and Winter (1979) for the paper and Nelson and Winter (1982) for the book.

  41. 41.

    F t,j denotes the financial volume, MU t,j the mark-up factor, \(\mathit{UC}_{t+1,j}^{e}\) denotes the expected unit production costs and MS t,j the market share of firm j and εe is the estimated elasticity of demand.

  42. 42.

    Note that the first of the two graphical representations of the model by Nelson and Winter (1982) is based on the presentation in Gerybadze (1982), while the second graphical representation is based on the representation in Knottenbauer (2000).

  43. 43.

    See Gerybadze (1982).

  44. 44.

    The production is zero if the necessary technology is not available.

  45. 45.

    M t,k denotes the value of total demand.

  46. 46.

    RATE denotes the interest rate, VCFAC the variable costs per capital unit and δ the depreciation rate.

  47. 47.

    Here BANK denotes the coefficient of external finances and DEP t,i denotes the amount of depreciation of firm j.

  48. 48.

    MU t,i is defined as in the Nelson-Winter-Model, while UNCOST denotes the unit costs.

  49. 49.

    See Perroux (1948) and Perroux (1988).

  50. 50.

    Perroux terms them: la force, le pouvoir and la contrainte.

  51. 51.

    The idea of circular causation is taken up by Kaldor (1957) and developed into a model of cumulative causation.

  52. 52.

    See Krugman (1991) and to the relationship between the new economic geography and processes of circular causation Pflüger (2005).

  53. 53.

    See Canova (2001) who reports on clustering in regions around growth poles.

  54. 54.

    See Krugman (1991).

  55. 55.

    With Krugman, absolute convergence refers to a state where all manufacturing is situated in one region.

  56. 56.

    See Krugman (1991), p. 497.

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  1. European Institute for International Economic Relations (EIIW), University of Wuppertal, Wuppertal, Germany

    Jens Kai Perret

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Perret, J.K. (2014). Growth Theoretical Aspects. In: Knowledge as a Driver of Regional Growth in the Russian Federation. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-40279-1_4

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