Motivation

A great many research problems in economics, as in other disciplines, we would imagine, are internally generated by the subject. Seminal contributions are those which formulate new questions, or pose old questions in a novel and tractable manner. Such contributions often have the habit of attracting large research followings in rapid succession, refining, extending and embellishing the original analysis. It is at this stage that the problems analysed are internally generated; that is, prompted exclusively by the earlier contributions. This is the Baroque stage in a problem area.

Such ‘cumulative causation’ in the temporal characteristics of research output is not difficult to explain. There are strong dynamic scale economies in any one line of research. The second paper on a well-formulated problem area is a great deal easier to write than the first, the third easier than the second, and so on. There are exceptions, of course; there always are. And in any case, ‘cost reduction’ cannot go on indefinitely; at some stage decreasing returns set in. But there are extensive spill-overs in learning in the field of academic research. This sets in motion for a time the phenomenon of cumulative causation originating from the initial investment in the production of an ‘idea’.

We say this with some feeling. It has been recognized for a long while that ‘knowledge’ (or ‘information’), the output of research and development (R&D) activity, possesses unusual properties – among which the feature we began with is an instance.