Endogenous Growth: Fragile Foundations? |
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| Authors: | Yunfang Hu Murray C. Kemp Koji Shimomura |
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| Affiliation: | Research Institute for Economics and Business Administration, Kobe University, Rokkodai, Nada, Kobe 657-8501, Japan. E-mail: .; Department of Economics, Macquarie University, Sydney, NSW 2109, Australia. E-mail: .; Research Institute for Economics and Business Administration, Kobe University, Rokkodai-cho, Nada-ku, Kobe 657-8501, Japan. Tel/Fax: 81-78-803-7002;E-mail: . |
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| Abstract: | The Frankel, Romer and Lucas theories of endogenous growth rest on the assumptions of knowledge‐based externalities and price‐taking representative agents. It is argued that, in a context of long‐run growth, these assumptions are mutually incompatible, that representative agents will cooperate to internalize the externalities and will cease to be price takers, and that, therefore, the relevance of theories based on those assumptions must be questioned. |
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