The authors analyze an endogenous growth model with economy-wide increasing returns, in which a public input is essential for private production. Within such a framework, it is shown that a continuum of equilibria and global indeterminacy can arise for reasonable parameter values, simply due to...

In neoclassical theory, knowledge generates increasing returns-and therefore growth-because it is a public good that can be costlessly reused once created. In fact, however, much knowledge in the economy is actually tacit and not easily transmitted-and thus not an obvious source of increasing...

This paper explores the relationship between aggregate and relative congestion, returns to scale and economic growth. Aggregate congestion reduces the effective productivity of capital; relative congestion reduces the effective productivity of labour. Both forms of congestion adversely affect...

Standard R&D growth models have two disturbing properties: The presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's...

This paper reviews various types of increasing returns from a critical perspective. Increasing returns have been introduced both at the level and at the aggregate level in a monopolistic-competition model. We show that the degree of the aggregate returns to scale is a linear combination of three...

How is sustained, exponential growth in per capita income possible? This paper argues that endogenous fertility and the increasing returns to scale implied by the non-rivalry of ideas are the fundamental ingredients in understanding endogenous growth. Large populations contain more Isaac Newtons...