Non‐scale Models of Economic Growth

Growth models that incorporate nonrivalry and/or externalities imply that the size of an economy may influence its long-run growth rate. Such implied scale effects run counter to empirical evidence. This paper develops a general growth model to examine conditions under which balanced growth is void of scale effects. The model is general enough to replicate well known exogenous, as well as endogenous, (non-) scale models. The authors derive a series of propositions that show that these conditions for nonscale balanced growth can be grouped into three categories that pertain to (1) functional forms, (2) the production structure, and (3) returns to scale.