Endogenous growth and entropy

• Type: Article in International Scientific Journal
• Date: 2018

Authors

Sequeira, TN (Author) Other; Pedro Rui Mazeda Gil (Author) FEP; Óscar Afonso (Author) FEP

Journal

Title: Journal of Economic Behavior and Organization

Vol. 154

Pages: 100-120

ISSN: 0167-2681

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 20 Citations

ISI Web of Science

Scopus - 21 Citations

Other information

Authenticus ID: P-00P-EE3

DOI: 10.1016/j.jebo.2018.07.019

Abstract (EN): This paper offers novel insights regarding the role of complexity in both the transitional and the long-run dynamics of the economy. We devise an endogenous growth model that encompasses long-run economic change building on the concept of entropy as a time varying state-dependent complexity effect. We show that the empirical evidence supports entropy as an 'operator' of the complexity effect. It also suggests that part of the modern innovations have a stabilizing role in the complexity of the economies, as the 'operator' levels off despite the continuous increase in the measure of technological varieties. The model features endogenous growth, with null or small scale effects, or stagnation, in the long run. The model can replicate well the take-off after the industrial revolution and the productivity slowdown in the second half of the XXth century. Long-run scenarios based on in-sample calibration are discussed, and may help explain (part of) the growth crises affecting the current generation.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 21