He then describes Romer's opinion on Arrow's papers of the 60's which had three characteristics: 1 Uncertain, 2. inappropriable and, 3. indivisible. Knowledge happens to be part of these categories of growth. It is also said to be a nonrival good because it can't ever be "used up" and depreciated. Knowledge of yesterday is still has the same value. There is a good chart on page 286 that describes how Romer put it in to perspective.
He then poses the question, what exactly are private and public goods? What is the English language? It is something we all have privately but use publicly, how does this transfer into knowledge and advancement?
He ends with this quote "The economics of nonrival goods were very different from those of people and things"-pg 287
B for Sue for a capitalization error.
ReplyDeleteIn this section, Romer starts to hit on the key: ideas are nonrival. We may try to make them excludable, but that misses the point. This is, that we come up with new ideas to get some gains, but there are always spillovers. So, spillovers aren't the source of growth so much as they are growth itself.
The Tyler Cowen mentioned here is the younger incarnation of the now world-famous economics blogger.
And the Hal Varian mentioned with him on pg. 286 left economics (after writing the best graduate micro text) to become one of the big thinkers at a little company called ... Google.