Knowledge, consumption, and endogenous growth

In neoclassical theory, knowledge generates increasing returns - and theref ore growth - because it is a public good that can be costlessly reused once created. In fact, however, much knowledge in the economy is actually tacit and not easily transmitted -and thus not an obvious source of increasing r eturns. Several writers have responded to this alarming circumstances by af firming hopefully that knowledge today is increasingly codified, general, a nd abstract - and increasingly less tacit. This paper disputes such a trend . But all is not lost: for knowledge does not have to be codified to be reu sed and therefore to generate economic growth.