Joan Robinson: early endogenous growth theorist

Abstract

We start from Robinson’s article on Harrod’s Dynamic Economics and her criticism that technological change was exogenous: ‘in Mr. Harrod’s world, technical progress falls like the gentle dew from heaven and is not susceptible to any economic influence’. Throughout her work she highlighted the endogenous sources of technological progress and growth and pre-empted both the National Systems of Innovation (NSI) literature and New Growth Theory (NGT), where the latter (NGT) appears to be neither new, nor able to explain innovation, growth and convergence trajectories. We also show that the productivity slowdown in advanced economies is explained by a fall in the wage share, a drop in the rate of accumulation of capital and prioritisation of incentives for R&D over policy instruments to diffuse innovation. While for developing economies, the failure of neoclassical economics to resolve the paradox of promoting market incentives for diffusion, while protecting intellectual property rights, implies an inevitable slowing of convergence.