This chapter is loosely grouped into four parts. Part one is composed of Sections 8.1 through 8.5. Part two consists of a single long Section 8.6. Part three is made up of Sections 8.7 and 8.8, and part four is Section 8.9. The first part of this chapter collects a number of bare-bones models and topics that are loosely tied to the notion of growth, market shares, and fluctuations.

The bare-bones models in this part may be used, singly or in some combinations, to construct more fully specified models of growth or fluctuation. For example, Aoki and Yoshikawa (2001) describe a model that uses some of the bare-bones models as components to show how demand saturation limits growth. A second example is described in Section 8.6. The third example is discussed in Chapter 9.

We begin this chapter by discussing two mini-models, called Poisson and urn models, for explaining how economies grow by inventing new goods or creating new industries. These models provide different explanations of growth from those in the literature on endogenous growth models.

The two models in Section 8.1 provide two explanations of economic growth that are different from standard ones based on technical progress, that is, total factor productivity models or endogenous growth models. The flavor of the difference may be captured by saying that in the endogenous growth models an economy grows by improving the quality of existing goods, whereas in our models it grows by introducing new goods.