Working Paper: NBER ID: w29126
Authors: Charles I. Jones
Abstract: The nonrivalry of ideas gives rise to increasing returns, a fact celebrated in Paul Romer's recent Nobel Prize. An implication is that the long-run rate of economic growth is the product of the degree of increasing returns and the growth rate of research effort; this is the essence of semi-endogenous growth theory. This paper interprets past and future growth from a semi-endogenous perspective. For 50+ years, U.S. growth has substantially exceeded its long-run rate because of rising educational attainment, declining misallocation, and rising (global) research intensity, implying that frontier growth could slow markedly in the future. Other forces push in the opposite direction. First is the prospect of "finding new Einsteins": how many talented researchers have we missed historically because of the underdevelopment of China and India and because of barriers that discouraged women inventors? Second is the longer-term prospect that artificial intelligence could augment or even replace people as researchers. Throughout, the paper highlights many opportunities for further research.
Keywords: Economic Growth; Semiendogenous Growth Theory; Research Effort; Educational Attainment
JEL Codes: E00; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| population growth (J11) | number of researchers (C90) |
| number of researchers (C90) | stock of ideas (O36) |
| stock of ideas (O36) | income per person (D31) |
| growth rate of researchers (O39) | growth rate of income per person (O47) |
| educational attainment (I21) | economic growth (O49) |
| research intensity (I23) | economic growth (O49) |
| declining misallocation (D61) | economic growth (O49) |
| slowing population growth (J11) | future economic growth (O49) |
| underrepresented groups (J15) | future economic growth (O49) |