The New Growth Theory of Dixie Stiglitz Model

Although the new growth theory came into being a few years later than the new trade theory, its basic theoretical experience is very similar to the new trade theory: it has also experienced the transformation from the analytical framework of perfect competition to monopoly competition, from external economies of scale such as externalities or spillover effects to internal economies of scale, and also benefited from the inspiration of D-S model. Specifically, in modern economic growth theory,

In this version of Solow's growth model, the long-term economic growth rate depends largely on the rate of technological progress, but unfortunately, this rate of technological progress is exogenous. In order to find the endogenous determinants of economic growth and make a more reasonable explanation for some empirical facts (such as convergence and immigration) that Solow's growth model can't explain well, the first round of new growth theory represented by Romer (1986) and Lucas (1988) rose in the mid-1980s. Mainly with the help of external economies of scale (learning by doing, externalities and spillover effects, etc.) to carry out theoretical exploration. ) and perfectly competitive market structure, that is, it is studied under the framework that the whole economy presents economies of scale, but individual manufacturers follow diminishing returns (thus compatible with perfectly competitive market structure). A series of papers or works by Romer (1987, 1990), Ahong and Howett, Grossman and Helpmann began to take imperfect competition as the basic analysis framework, and launched the second round of new growth theory based on D-S model. Taking Romer as an example, this paper briefly introduces the internal relationship between this model and the new growth theory. Romer (1987, 1990) borrowed the D-S model production function developed by Ethel (1982), and investigated the internal mechanism of endogenous economic growth caused by product types under the framework of monopolistic competition. Among them, in Romer's paper "Increasing Income Based on Specialization" (1987), the output of the final product department is only a function of labor and intermediate input; In the paper "Endogenous Technological Change" (1990), human capital investment is considered. In Romer's model (1990), there are three departments: final product, intermediate product and research and development. The production function of the final product is, where Y = HY, Y=L and y = x _ i.

Don't invest in human capital (used in the final product department), simple labor and intermediate products; The output (new design) of R&D department is a function of human capital and knowledge stock-Dixit Stiglitz model.

; The intermediate department uses some resources (such as capital) and new designs to produce intermediate products as the input of the final product department, assuming that each production unit of intermediate products needs η unit capital. The significance of endogenous growth of this model can be found without deducing the solution process of equilibrium in detail. Because the production of intermediate products is symmetrical in the production function of the final product, the output of each intermediate product should be the same under the equilibrium condition, which is recorded as X. Assuming that the intermediate variety category decided by the R&D department is A, there must be, that is. Substitute x into the students of the finished product department

Production functions are available. The production function shows that even if the three inputs of human capital HY, labor force L and capital K remain unchanged (like the neoclassical hypothesis, these inputs are homogeneous to the output), the continuous increase of intermediate variety N can also lead to the continuous growth of output and the continuous improvement of social welfare. The above analysis shows that the D-S model and its analytical framework provide a good theoretical explanation for internal economies of scale without increasing any complexity. At present, it has basically become a standard tool for the study of international trade theory and economic growth theory. In addition, it is precisely because of this creative contribution of dixit and Stiglitz that economists can now analyze international trade and economic growth under the same framework and regard it as the same economic problem to a great extent (nothing more than the increase of product categories and the improvement of social welfare).