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Sources of U.S. Economic Growth in a World of Ideas
Charles I. Jones
American Economic Review. Feb 2002, Vol. 92, No. 1: Pages 220-239

Sources of U.S. Economic Growth in a World of Ideas

Charles I. Jones*

*Department of Economics, University of California-Berkeley, Berkeley,CA94720.

http://elsa.berkeley.edu/~chad

Abstract

Rising educational attainment and research intensity in recent decades suggest that the U.S. economy is far from its steady state. This paper develops a model reconciling these facts with the stability of U.S. growth rates. In the model, long-run growth arises from the worldwide discovery of ideas, which depends on population growth. Nevertheless, constant growth can temporarily proceed at a faster rate, provided research intensity and educational attainment rise steadily over time. Growth accounting reveals that these factors explain 80 percent of recent U.S. growth, with less than 20 percent coming from world population growth.