One of the world¡¯s leading economists has said that ÖйúAƬ and the accumulation of knowledge is a ¡°key component¡± in driving economic growth today and is challenging traditional practices such as ¡°accumulation of capital¡± in importance.

Gene Grossman, Jacob Viner professor of international economics at Princeton University, spoke to Times ÖйúAƬ after receiving the Onassis Prize for International Trade, one of three $200,000 (?132,024) awards presented to leading economists in recognition of their work.

He said that economists have over the past quarter century realised that the accumulation of capital alone cannot increase growth because ¡°you¡¯re going to run into diminishing returns¡±.

¡°Eventually, the incentive to do so is bound to peter out. And so new theory is really focused on the accumulation of knowledge as the driving force behind growth,¡± Professor Grossman?said. ¡°If we¡¯re going to understand the relationship between globalisation and growth, we need to think about the relationship between globalisation and the creation and diffusion of knowledge.

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¡°In that context, you can see that ÖйúAƬ is a key component. Another thing that I stress is the importance of the diffusion of ideas and exchange of ideas.¡±

Professor Grossman was expanding on a speech that he gave to City University London¡¯s Cass Business School, which, with sponsorship from the Alexander S. Onassis Public Benefit Foundation, awards the Onassis Prizes. In that address, he said that knowledge was ¡°different from capital, because it is often non-rivalrous¡± and ¡°generates increasing returns to scale¡±. He added that growth is linked to international integration and the flow of ideas.

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In developing that flow, ¡°there is no better way than having international academics and students interacting with one another,¡± he told THE. ¡°Our graduate programme at Princeton in economics is now 75 per cent foreign students. When we look to hire assistant professors, a majority of those we consider are non-Americans.

¡°This is critically important because growth is driven by creation of new ideas ¨C in the sciences and engineering especially, but also in social sciences.¡±

Restrictions on the international movement of academics were ¡°hugely damaging¡± and would do much more long-term harm than ¡°restrictions on the imports of goods¡±.

¡°The cost of not having foreign ideas and the brightest foreign scientists who want to come to your country is significant,¡± he said. ¡°The discussion in the US of sending Mexicans back to Mexico, which fortunately won¡¯t be feasible, is scary. If it were feasible, it would be an insane idea. Similarly, some of the discussion I hear about immigration in Europe is very scary.¡±

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Professor Grossman also addressed the ¡°tremendous concern¡± that economics is viewed as a male-dominated, sexist field.

¡°There is an indirect discrimination that occurs in academic economics inasmuch as ours is a very competitive, aggressive field, where you have to assert yourself to succeed.

¡°However, when a man does so, he?shows that he is really on top of his work and willing to defend his ideas. If a woman does the very same thing, there¡¯s a?different, and often negative, perception,¡± he said. ¡°The behaviour that¡¯s necessary for success is accepted in one gender and frowned upon in the other.¡±

john.elmes@tesglobal.com