A New Asymptotically Non-Scale Endogenous Growth Model

The paper explores an endogenous growth model in which scale effects asymptotically vanish and an economy grows without population growth. The key mechanism behind these features is substitution between investing in capital and in knowledge when firms face growing uncompensated knowledge spillovers. The model shows that firms invest more in capital than in knowledge and thus scale effects asymptotically evaporate as the number of population and thus uncompensated knowledge spillovers increase, and an economy grows without population growth.