Idea Flows and Economic Growth

Buera, Francisco J.; Lucas, Robert E.

doi:10.1146/annurev-economics-063016-104414

Cited by 26 publications

(15 citation statements)

References 44 publications

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“…Our paper is closely related conceptually and technically to the idea diffusion literature including Luttmer (2007), Alvarez et al (2008), Lucas (2009), Alvarez et al (2013), Perla and Tonetti (2014), and Lucas and Moll (2014). Buera and Lucas (2018) provides a survey of the literature.…”

Section: Recent Literaturementioning

confidence: 91%

“…To set the stage, consider Perla and Tonetti (2014), which is essentially a discrete-time version of the economy in this paper with η = γ = 0 and is similar to cases in the literature such as Lucas and Moll (2014), as discussed in Buera and Lucas (2018). In Perla and Tonetti (2014) a BGP equilibrium with strictly positive growth exists only for distributions with power-law tails; the long-run growth rate is a function of the shape of the initial distribution and the cost of adoption.…”

Section: Productivity Distributionmentioning

confidence: 99%

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Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier

Benhabib¹,

Perla²,

Tonetti³

2017

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and various seminar participants for useful comments and suggestions. Aref Bolandnazar and Brad Hackinen provided excellent research assistance. Jesse Perla gratefully acknowledges support from the University of British Columbia Hampton Grant. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Section: Recent Literaturementioning

confidence: 91%

Section: Productivity Distributionmentioning

confidence: 99%

Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier

Benhabib¹,

Perla²,

Tonetti³

2017

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“…Emphasizing environments that are consistent with Fréchet productivity distributions, Buera and Lucas [2018] survey models in which productive agents meet randomly and learn from each other. In particular, they suggest considering an upper bound on how much individuals can gain in a random meeting and characterize an approximate solution to the resulting delay-differential equation.…”

Section: Related Literaturementioning

confidence: 99%

“…Although entrants are more productive than exiting firms, replicating the entire incumbent population of firms is inherently difficult because entrants are in [b t ; b t + ] while incumbents are spread throughout [b t ; 1). 4…”

Section: Figure 2 Relative Factor Demandsmentioning

confidence: 99%

Bounded Learning from Incumbent Firms

Luttmer

2020

Preprint

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Social learning plays an important role in models of productivity dispersion and longrun growth. In economies with a continuum of producers and unbounded productivity distributions, social learning can sometimes leave long-run growth rates completely indeterminate. This paper modifies a model in which potential entrants attempt to imitate randomly selected incumbent firms by introducing an upper bound on how much entrants can learn from incumbents. When this upper bound is taken to infinity, a unique long-run growth rate emerges, even though the economy without upper bound has an unbounded continuum of balanced growth rates.

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“…Examples of influential contributions for economic growth theory published in recent years, which make pervasive use of the benchmark intertemporal utility maximization framework, includeLucas and Moll (2014),Buera and Lucas (2018),Acemoglu and Cao (2015),Aghion et al (2015),Akcigit et al (2016),Benhabib et al (2014),Grossman and Helpman (2015), andStokey (2015).…”

mentioning

confidence: 99%

Hand-to-mouth consumers, rule-of-thumb savers, and optimal control

Gomes

2020

J Econ Interact Coord

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Contemporaneous research in macroeconomics is experiencing a methodological transition. The well-established representative agent optimal control model, which has served for many decades as the fundamental point of reference to approach most of the aggregate phenomena in economics, is being gradually adapted or replaced. In the new settings, agent heterogeneity prevails: while some agents eventually continue to take optimal intertemporal decisions, others do not possess the ability or the willingness to do so, and therefore resort to simple heuristics in their decision-making processes. In this study, the basic Ramsey growth model of intertemporal choice is reinterpreted in the light of the heterogeneity assumption. Four different frameworks are proposed, and the respective dynamics investigated; these frameworks contemplate: (i) the coexistence of optimal planners and hand-to-mouth consumers; (ii) the coexistence of optimal planners and rule-of-thumb savers; (iii) intertemporal discount rate heterogeneity with endogenous determination of hand-to-mouth behavior; (iv) absence of optimal planning and full heuristic behavior. The derived results point to a richness of outcomes that can only be unveiled once the simple dynamic growth setup is expanded to include different consumption-savings profiles. Keywords Heterogeneous agents • Consumption heuristics • Intertemporal preferences • Hand-to-mouth consumers • Rule-of-thumb savers JEL Classification O41 • E21 • D15 • C61

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Idea Flows and Economic Growth

Cited by 26 publications

References 44 publications

Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier

Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier

Bounded Learning from Incumbent Firms

Hand-to-mouth consumers, rule-of-thumb savers, and optimal control

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