The Jones model is a growth model developed in 1995 by economist Charles I. Jones. The model is essentially identical to the Romer model, in particular it generalizes or modifies the description of how new technologies, ideas or design instructions arise. This should take into account the criticism made of the Romer model that the long-term growth rate depends positively on the size of the population. This is problematic in several respects: on the one hand larger countries do not necessarily grow faster. On the other hand, an increasing population or intensified research work did not increase the growth rate on average. Furthermore, the extent of influence from the current state of knowledge on new inventions.
For a single company i According to the following modeling applies to the emergence of new ideas or design instructions: With where the parameters take the following values:, For parameter values of results in the Romer model. After aggregation across all companies results: Here the parameters have the following meaning:
lambda restricts the effect of additional labor input in the research sector. Although more researchers are producing more ideas, each researcher is contributing less and less. This relationship is also called standing-on-shoes effect. This parameter reflects a possible negative externality of the duplication. For a single company, however, this problem does not exist because within a research department, all researchers know about the work of their colleagues.
: A negative value aims at giving only finitely many potential new ideas for a given time. This case is also referred to as a fishing-out effect: over time, the relatively "simple" inventions are made first; Today, it is becoming increasingly difficult to develop a new drug.
: Here, productivity in the research sector would be independent of existing knowledge. For example, a physicist should be able to develop the same new ideas, whether he lives today or 100 years ago.
: Describes in principle a positive externality and the case encountered in reality. The current state of the art is to a certain extent involved in research. The standing-on-shoulders effect is only weakened compared to the Romer model.
Growth rate
In the Jones model, growth in steady state is given by:
