Knowledge, Consumption, and Endogenous Growth
Posted: 11 Jun 2001
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 returns. Several writers have responded to this alarming circumstances by affirming hopefully that knowledge today is increasingly codified, general, and abstract-and increasingly less tacit. This paper disputes such a trend. But all is not lost: for knowledge does not have to be codified to be reused and therefore to generate economic growth.
Keywords: Tacit knowledge, Increasing returns, Growth theory, Knowledge reuse, Codification
JEL Classification: O3, O4
Suggested Citation: Suggested Citation