Abstract
This paper proposes a computable dynamic input-output model to examine interactions between knowledge accumulation and economic development with endogenous technical change. The model explicitly introduces new sectors called knowledge sectors into the traditional dynamic input-output economic system. It is assumed that the growth of knowledge is the main source of technical change. The first part of the paper describes the micro-economic foundation of our model, whose framework is the adjustment-cost model of investment, knowledge and factor demands. The second part contains the empirical specification of the firms' micro-behavior and an input-output description of multi sectorial interactions between outputs, knowledge, and factor inputs.
