Knowledge, Institution, Power, and Economic Growth: Toward a Unified Economics of Growth

48 Pages Posted: 25 Apr 2016

See all articles by Shiping Tang

Shiping Tang

Fudan University - School of International Relations and Public Affairs (SIRPA)

Zhan Hu

Fudan University - School of Sociology and Public Management

Yun Li

Fudan University, School of Sociology and Public Management, Students

Date Written: April 17, 2016

Abstract

The economics of growth centered on technological knowledge in endogenous growth models and the new institutional economics of growth centered on institutions have largely chartered their separate courses so far. In this paper, we construct a new growth model that brings the two economics of growth together by first bringing the quality of the stock of knowledge and the quality of economic institutions into an endogenous growth model and then making the model an evolutionary one via competition and selection of agents with different institutions. Our new model, illustrated with historical data and agent-based modeling (ABM) simulations, nicely accounts for two key stylized facts of economic growth: the coming of the Industrial Revolution and the “Great Divergences” thereafter. Our new model also makes it clear that the most critical factor shaping economic performance across time and space is the (mis-)allocation of production factors by political decisions: Who, under what institutions and power relationship, decides to deploy what knowledge and other production factors to make what. As such, the science of economic growth must be political economy with power/politics rather than neoclassical economics without power/politics.

Suggested Citation

Tang, Shiping and Hu, Zhan and Li, Yun, Knowledge, Institution, Power, and Economic Growth: Toward a Unified Economics of Growth (April 17, 2016). Available at SSRN: https://ssrn.com/abstract=2766052 or http://dx.doi.org/10.2139/ssrn.2766052

Shiping Tang (Contact Author)

Fudan University - School of International Relations and Public Affairs (SIRPA) ( email )

220 Handan Road
Shanghai, 200433
China

Zhan Hu

Fudan University - School of Sociology and Public Management ( email )

Beijing West District Baiyun Load
Shanghai, 100045
China

Yun Li

Fudan University, School of Sociology and Public Management, Students ( email )

Beijing West District Baiyun Load
Shanghai, 100045
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
92
Abstract Views
464
rank
332,761
PlumX Metrics