Abstract
It is widely believed that a higher degree of competition on goods and factor markets should foster aggregate economic growth. However, there have been very few attempts to derive a positive relationship between competition and growth in formal growth models. The old neoclassical theory of growth as developed by Solow (1956) assumes perfect competition on all markets and thus seems to eliminate all possible growth effects of monopoly power and other restraints of competition. On the other hand, the ‘new’ growth theory, following the pioneering works by Romer (1986), Lucas (1988) and Grossman and Helpman (1991), has made use to a large extent of models which include some form of monopolistic competition. But this framework rather seems to justify restraints of competition in order to promote innovative activities.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Aghion, P., Dewatriport, M. and Rey, P. (1997): Corporate Governance, Competition Policy and Industrial Policy, European Economic Review 41, 797–805.
Aghion, P. and Howitt, P. (1992): A Model of Growth through Creative Destruction, Econometrica 60, 323–351.
Aghion, P. and Howitt, P. (1996): Research and Development in the Growth Process, Journal of Economic Growth 1, 49–73.
Arrow, K.J., Chenery, H.B., Minhas, B.S. and Solow, R.M. (1961): Capital-Labor Substitution and Economic Efficiency, Review of Economics and Statistics 43, 225–250.
De la Grandville, O. (1997): Curvature and the Elasticity of Substitution: Straightening It Out, Journal of Economics 66, 23–34.
De la Grandville, O. (1989): In Quest of the Slutzky Diamond, American Economic Review 79, 468–481.
Grossman, G.M. and Helpman, E. (1991): Innovation and Growth in the Global Economy, Cambridge, MA: MIT Press.
Hicks, J. R. (1932): The Theory of Wages, London.
Klump, R. (1995): On the Institutional Determinants of Economic Development. Lessons from a Stochastic Neoclassical Growth Model, Review of Economics 46, 138–151.
Klump, R. (1997): Elasticity of Substitution and Economic Growth: A Note on the De la Grandville Hypothesis, University of Ulm, Discussion Papers in Economics.
Lucas, R.E. (1988): On the Mechanics of Economic Development, Journal of Monetary Economics 22, 3–42.
Maußner, A. and Klump, R. (1996): Wachstumstheorie, Berlin et al.: Springer.
Neuberger, D. and Neumann, M. (1991): Banking and Antitrust: Limiting Industrial Ownership by Banks?, Journal of Institutional and Theoretical Economics 147, 188–199.
Neumann, M. (1969): Die Erfindungsindustrie — Eine Alternative zum Schumpeterschen Innovationsmodell, Jahrbuch ßr Sozialwissenschaft 20, 310–317, reprinted in Dürr, E. (ed.), Wachstumstheorie, Darmstadt 1978.
Neumann, M. (1976): Innovationen, Wachstum und Freizeit, Kyklos 29, 639–659.
Neumann, M. (1988): Industrial Organization and Public Policy, International Journal of Industrial Organization 6, 155–166.
Neumann, M. (1990): Zukunftsperspektiven im Wandel. Lange Wellen in Wirtschaft und Politik, Tübingen: Mohr.
Neumann, M. (1994): Theoretische Volkswirtschaftslehre III. Wachstum, Wettbewerb und Verteilung, 2nd ed., München: Vahlen.
Romer, P.M. (1986): Increasing Returns and Long-Run Growth, Journal of Political Economy 94, 1002–1037.
Romer, P.M. (1990): Endogenous Technological Change, Journal of Political Economy 98, 71–102.
Schumpeter, J.A. (1911): Theorie der wirtschaftlichen Entwicklung. Eine Untersuchung über Unternehmergewinn, Kapital, Kredit und den Konjunkturzyklus, Berlin: Dunker & Humblot.
Smith, A. (1950): An Inquiry into the Nature and the Causes of the Wealth of Nations, Edwin Carman ed., 6th ed., London (first published 1776).
Solow, R.M. (1956): A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics 70, 65–94.
Ventura, J. (1997): Growth and Interdependence, Quarterly Journal of Economics 62, 57–84.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1999 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Klump, R. (1999). Competition and Growth. In: Mueller, D.C., Haid, A., Weigand, J. (eds) Competition, Efficiency, and Welfare. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5559-9_17
Download citation
DOI: https://doi.org/10.1007/978-1-4615-5559-9_17
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-7542-5
Online ISBN: 978-1-4615-5559-9
eBook Packages: Springer Book Archive