ABSTRACT
This chapter discusses the models of a one-product competitive growing economy on the assumptions that the rate and nature of technical progress, the growth rates of the population, and the savings ratios were all given and constant. It considers the way in which economic changes may themselves affect the basic determinants of economic growth. The chapter determines the rate and nature of technical progress. It shows the problems connected with the promotion of technical progress in fact are intimately bound up with economic 'indivisibilities' and 'externalities'. The chapter argues that technical progress occurred by a process of costless inspiration which occurred to all competing producers simultaneously. It distinguishes the case where the idea produced by organized research is useful only to the firm which has organized the research. The chapter also distinguishes the case where the idea produced by organized research is useful to each firm regardless of whether that firm organized the research or no.
