Technology Dissemination and Economic Growth: Some Lessons for the New Economy

Abstract:     
This Paper attempts to draw lessons for the New Economy from what economists know about technology dissemination and economic growth. It argues that what is most notable about the New Economy is that it is knowledge-driven, not just in the sense that knowledge now assumes increasing importance in production, thereby raising productivity. Instead, it is that consumption occurs increasingly in goods that are like knowledge - computer software, video entertainment, gene sequences, Internet-delivered goods and services - where material physicality matters little. That knowledge is aspatial and nonrival is key. Understanding the effective exchange and dissemination of such knowledge-products will matter more than resolving the so-called productivity paradox.

Keywords: Aspatial, demand, endogenous growth, endogenous technology, human capital, industrial revolution, infinitely expansible, neoclassical growth, nonrival, productivity paradox, weightless economy

JEL Classifications: N10, N15, O33, O57

Working Paper Series