Towards a disequilibrium theory of endogenous economic growth
Author: Ayres, Leslie W. INSEAD Area: Economics and Political ScienceIn: Environmental and resource economics, vol. 11, no.3-4, 1998 Language: EnglishDescription: p. 289-300.Type of document: INSEAD ArticleNote: Please ask us for this itemAbstract: This paper discusses the need for a new approach to economic growth theory. The standard theory of growth-in-equilibrium driven by exogenous, uncaused, productivity gains has an implication that is both unjustified and perverse from a policy perspective: that government intervention of any kind can only introduce constraints and reduce option space, thus decreasing potential growth. Growth theory should (1) acknowledge the importance of natural resources, especially fossil fuels, as a driver of past and present economic growth (2) incorporate an explicit recognition that growth is a consequence of technological innovation, that often responds to natural resource scarcities or other societal needs and (3) explicitly reflect the fact that the important (i.e. scarce) factors of production in economics can and do change over time, i.e. from a rural "cowby" economy of the past to an urbanized "spaceship" economy of the future. In short, it should reflect the fact that "necessity is the mother of invention"| Item type | Current location | Call number | Status | Date due | Barcode | Item holds |
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This paper discusses the need for a new approach to economic growth theory. The standard theory of growth-in-equilibrium driven by exogenous, uncaused, productivity gains has an implication that is both unjustified and perverse from a policy perspective: that government intervention of any kind can only introduce constraints and reduce option space, thus decreasing potential growth. Growth theory should (1) acknowledge the importance of natural resources, especially fossil fuels, as a driver of past and present economic growth (2) incorporate an explicit recognition that growth is a consequence of technological innovation, that often responds to natural resource scarcities or other societal needs and (3) explicitly reflect the fact that the important (i.e. scarce) factors of production in economics can and do change over time, i.e. from a rural "cowby" economy of the past to an urbanized "spaceship" economy of the future. In short, it should reflect the fact that "necessity is the mother of invention"
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