SFB 303 Discussion Paper No. A - 512
Author: Funk, Peter
Title: Economic Possibilities for the Grandchildren of John Maynard Keynes
Abstract: This paper explores the impact of insatiable needs on the
sustainability and the direction of technological change and economic
growth. In a simple framework it is shown that growth can only be sustained
if either the opportunity costs of research are small at low levels of
research or if some needs are insatiable. The first source of sustained
growth (low opportunity cost of research) also enhances an efficient spread
of growth over different technologies and commodities, while the second
(insatiable needs) typically induces the 'wrong kind' of growth. In
connexion with Keynes' essay 'On the Economic Possibilities of our
Grandchildren' [1931], we consider relative needs as the main source of
insatiability of needs.
Keywords: Endogenous growth, sources of sustained growth, direction of growth,
relative needs
JEL-Classification-Number: D60, D62, O12, O30
Creation-Date: January 1996
URL: ../1996/a/bonnsfa512.pdf"
SFB 303 Homepage
19.05.1998, Webmaster