Sustainability and economy

09 Oct

Economic Nobel laureates William Nordhaus of Yale University and Paul Romer of New York University, though the entire press is talking only about the weather aspect, has the technology side as fundamental, Romer has made important theses in this area.
I leave the comments on William Nordhaus on “Economics and Policy Issues in Climate Change” for economists and ecologists, I can not assess the scope of their work.
Romer won mainly for his work “Increasing Returns and Long Run Growth” because the joint award is justified by the aspect of sustainability, but his work “Endogenous Technological Change” has equal importance.
Just to get an idea, the technology article has more than 27,000 quotations, because the central thesis that technology helps the development, contradicts the fallacy that technology harms the development and helps the concentration of income, against this also worked Elinor Ostrom (the first woman Nobel laureate in economics), Saskia Sassen and even the Marxist Frederic Jamenson.
The definition requires knowledge of the Solow Grow Growth Model (Jones, 1988), which indicates that exogenous technical progress is understood as external influence, as well as endogenous is what has internal influence, ie central, since the analyzes are endogenously.
This happens for reasons not explained in the model, the endogenous innovation techniques of change assign technical progress to systematic efforts by economic agents, an innovation is clearly not a predicted factor in a system.
The model explains, for example, how many companies could start spending resources by improving technology rather than simply increasing amounts of resources and capital, one might think, but the company will lay off, it is not so.
If the additional costs are only relative to technology they can and are generally smaller than the investments in liabilities and personnel, it is not directly justifying the layoffs, what happens is that the innovation disables some functions, but creates new, often in number equal or even higher and with higher salaries for specialization.
To understand these effects there is a work, what I read for this post, written with Luis A. Rivera-Batiz (pdf), titled. “International trade with endogenous technological change”, in which they use two fundamental sectors in the industry: a research and development sector that produces innovations, and another, manufacturing.

Jones C (1998). Introduction to Economic Growth. W.W. Norton, 1998, 1rst Edition, 2002 Second Edition.


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