AMER.GROWTH: Knowledge and Economic Growth in Germany

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Name: Claude Diebolt
Email: claude.diebolt@lameta.univ-montp1.fr
Institution: CNRS

Co-author: Monteils, Marielle, co-author.

Title: Knowledge and Economic Growth in Germany, 1872-1989

Internet Address of abstracted work: not available

By mail:
Claude Diebolt
8 Route de Montpellier
34160 Restinclieres (France)

Language: English

Abstract:
The debate concerning the various determinants of economic growth has
attracted considerable attention, both through the importance of its
implications in terms of economic policy and through the number of
theoretical and empirical analyses that it has engendered. Thus, the
argument according to which endogenous growth models explain
long-term economic growth is often put forward. It is held that the
production of knowledge induces self-maintained economic growth.
However, in spite of numerous theoretical developments, attempts at
empirical verification have run up against serious methodological
difficulties. The first and most serious stumbling block is the way
in which an intangible good of incommensurable size such as knowledge
is evaluated. In addition, the great majority of the empirical tests
performed to date concern the position of factors in growth or
studies of the cross-section-countries type with international
comparisons that nevertheless include no questions or answers
concerning whether or not knowledge can induce long-term economic
growth. Starting at this point, the main objective of this work is
the empirical testing of the models of Lucas (1988) and Romer (1990)
to justify or invalidate the probable endogenous nature of economic
growth induced by the production of knowledge. Its novelty is the use
of original statistics for Germany from 1872 to 1989 to test the
hypothesis of endogenous growth.

Two lines of research seem to take shape following our estimate of
the total stock of knowledge in Germany combined with our empirical
verification of the models of R.E. Lucas and P.M. Romer: ? the
first would consist of the partial or even total calling into
question of the theories of endogenous growth insofar as knowledge
does not grow in an unlimited manner but may increase at a slowing
rate, in contrast with the hypotheses that support the entire
construction of these new growth theories; ? the second is
directly inspired by the reflections of R.M. Solow concerning growth
theories. Indeed, the latter considers that growth theorists may have
been mistaken in considering only the rates of growth and not levels.
He considers that "[Ö] we should consider everything that permanently
raises the trajectory of the economy to be a factor of economic
growth, even if it does not affect its growth rate" (Histoire,
institutions et production sur le long terme, LíannČe de la
rČgulation, 2, 1998, p. 198).

This is an original idea as addressing the levels of economic growth
rather than its growth rate might make it possible to understand the
central role of activities in education and research and development
more effectively. Such a research orientation would thus encourage
the development of new economic growth models in which knowledge
would have a positive effect on the level of growth and not on its
rate.

Bibliography: Workshop 2000. Technical Change, Economic Growth and
Convergence in Europe. New Approaches to Comparisons and
Measurement. Lund, 22-23 September 2000, 27 pages.

Subject: G
Geographical Area: 4
Country/Region: Germany
Time Period: 9