Knowledge growth and the allocation of time

Robert E. Lucas, Benjamin Moll

Research output: Contribution to journalArticle

74 Scopus citations

Abstract

We analyze a model economy with many agents, each with a different productivity level. Agents divide their time between two activities: producing goods with the production-related knowledge they already have and interacting with others in search of new, productivity-increasing ideas. These choices jointly determine the economy's current production level and its rate of learning and real growth. We construct the balanced growth path for this economy. We also study the allocation chosen by an idealized planner who takes into account and internalizes the external benefits of search. Finally, we provide three examples of alternative learning technologies and show that the properties of equilibrium allocations are quite sensitive to two of these variations.

Original languageEnglish (US)
Pages (from-to)1-51
Number of pages51
JournalJournal of Political Economy
Volume122
Issue number1
DOIs
StatePublished - Feb 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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