American Inventiveness, 1870-1920

This paper extends the wealth-maximization model of invention in a new direction by taking into account the costs of information and by relating those costs to the urban-rural distribution of the population. The major empirical finding, obtained through a multiple regression analysis, is that the proportion of the population in urban areas and the number of inventions per capita were closely associated during the 1870-1920 period for a cross section of American states. This finding may well be significant for the explanation of economic growth as a self-sustaining process.