Creating a Learning Society

Joseph E. Stiglitz is University Professor at Columbia University and Co-Chair of Columbia University's Committee on Global Thought. He was winner of the 2001 Nobel Prize for Economics. He served on President Clinton's Council of Economic Advisors, and then joined the World Bank as chief economist and senior vice president. His most recent book is The Price of Inequality: How Today's Divided Society Endangers Our Future. Bruce C. Greenwald is Robert Heilbrunn Professor of Finance and Asset Management at Columbia Business School. He is director of the Heilbrunn Center for Graham and Dodd Investing and his books include Value Investing: from Graham to Buffett and Beyond and Competition Demystified: A Radically Simplified Approach to Business Strategy Portfolio.

It has long been recognized that most standard of living increases are associated with advances in technology, not the accumulation of capital. Yet it has also become clear that what truly separates developed from less developed countries is not just a gap in resources or output but a gap in knowledge. In fact, the pace at which developing countries grow is largely determined by the pace at which they close that gap. Therefore, how countries learn and become more productive is key to understanding how they grow and develop, especially over the long term. In Creating a Learning Society, Joseph E. Stiglitz and Bruce C. Greenwald spell out the implications of this insight for both economic theory and policy. Taking as a starting point Kenneth J. Arrows 1962 paper Learning by Doing, they explain why the production of knowledge differs from that of other goods and why market economies alone are typically not efficient in the production and transmission of knowledge. Closing knowledge gaps, or helping laggards learn, is central to growth and development.

Praise for Joseph Stiglitz: Joseph Stiglitz is a Nobel Prize-winning economist, and he deserves to be. Over a long career, he has made incisive and highly valued contributions to the explanation of an astonishingly broad range of economic phenomena, including taxes, interest rates, consumer behavior, corporate finance, and much else. Especially among economists who are still of active working age, he ranks as a titan of the field. -- Benjamin M. Friedman The New York Review of Books If one's attention is on the economic long run and the processes involved in economic change, innovation and learning quickly can be seen as at the center of the stage. Unfortunately, for the last half century the bulk of the attention in microeconomic theorizing has been on economic statics which is blind to these variables. This book is a welcome exception. -- Richard Nelson, Columbia University

PrefaceAcknowledgments for the SeriesAcknowledgments for the First Arrow LectureIntroduction, by Joseph E. Stiglitz and Bruce C. GreenwaldPart 1: Creating a Learning Society: A New Paradigm for Development and Social Progress: : Basic Concepts1. The Learning Revolution2. On the Importance of Learning3. A Learning Economy4. Creating a Learning Firm and a Learning Environment5. Market Structure, Welfare, and Learning6. The Welfare Economics of Schumpeterian CompetitionPart 2: Analytics7. Learning in a Closed Economy—the Basic Model8. A Two-Period, N-Good Model with Endogenous Labor Supply9. Learning with Monopolistic Competition10. Long-Term Growth and Innovation11. The Infant-Economy Argument for Protection: Trade Policy in a Learning EnvironmentPart 3: Policies for a Learning Society12. The Role of Industrial and Trade Policy in Creating a Learning Society13. Financial Policy and Creating a Learning Society14. Macroeconomic and Investment Policies for a Learning Society15. Intellectual Property16. Social Transformation and the Creation of a Learning Society17. Concluding RemarksPart 4: Commentary and Afterword18. Introductory Remarks for the First Annual Arrow Lecture, by Michael Woodford19. Further Considerations, by Joseph E. Stiglitz and Bruce C. Greenwald20. Commentary: The Case for Industrial Policy, by Philippe Aghion21. Commentary, by Robert Solow22. Commentary, by Kenneth ArrowAfterword: Rethinking Industrial Policy, by Philippe AghionNotesReferencesNotes on ContributorsIndex