Department of Humanities and Social Sciences
‘Innovation and Long run Economic Growth: An Overview" by Dr. Debasis Mondal’
Dr. Debasis Mondal
January 22, 2019, Tuesday, at 3:00 PM
Venue: Conference Room 2
Economists are often interested in understanding the determinants of long run economic progress of an economy as measured by the growth of its per capita income. For example, if India continues to grow at 7% rate for the next 10 years, income of its citizen would double in the next 10 years. What is the fundamental cause of this growth? Is it the accumulation of physical capital, human capital and/or technological progress that is making people more productive? During the 1950s and 1960s, there has been extensive research on this topic of long-run economic growth. Robert Solow – an MIT economist – attempted to mathematically model an economy with technological progress that is exogenous to the system. His model, famously known as the Solow-Swan model, established the primacy of technological progress in accounting for sustained increases in output per worker. Paul Romer asked the subsequent question: how can one construct mathematical model of an economy where technological change would be the result of intentional human actions, such as research and development (R&D). If people respond to incentives, then it is possible to alter the pace of technological progress by rightly designing the policy – say, a subsidy to R&D. Romer’s research has shown that technological change may better occur in market oriented economies where there are profits and losses for the entrepreneurs and where ideas can be protected by law – referred to as ‘intellectual property rights’. Innovations and intellectual property rights are linked in an important way in Paul Romer’s research. Accumulation of new-knowledge occurs through innovation and it is 2
the rate of innovation that determines the rate of accumulation of new knowledge. Paul Romer wrote two influential papers in the Journal of Political Economy during early 90’s. Each of them now has over 25000 citations in the google scholar. These papers are based on his PhD dissertation work done at the university of Chicago. In one of his papers, named as `Endogenous technological change’, he showed that it is the human capital that determines growth and free market economy allocates very few people into R&D.
About the speaker:
Dr. Debasis Mondal is Associate Professor of Economics at the Department of Humanities and Social Sciences at Indian Institute of Technology Delhi. Dr. Mondal received his Ph.D. in Economics from Indian Statistical Institute (Kolkata, 2008) and post doctoral degree from the Dept. of Economics, National University of Singapore, during 2008-2010. Earlier, he had obtained his M.S. in Quantitative Economics from Indian Indian Statistical Institute Kolkata in 2001. Dr. Modal’s research and teaching cover the areas of macroeconomics, international economics, public economics, microeconomics, Game Theory and economic growth. He had also previously taught international economics & principle of microeconomics at National University of Singapore.