Innovation Races, Strategic Externalities and Endogenous Growth.
The author expounds a tractable model of an infinite-horizon multisector economy where endogenous growth in the aggregate results from innovation races which go on in each and every sector. He identifies five externalities that have strategic implications: the 'contemporaneous real income,' the 'lagged real income,' the 'aggregate demand,' the 'Shleifer' and the 'competition' effects. The author proves that multiple stationary equilibria can exist and lead to different rates of growth, and shows that, in any stationary equilibrium, the rate of growth is constant. Finally, he proves that the rate of growth may be higher or lower than social welfare warrants. Copyright 1998 by The London School of Economics and Political Science
Year of publication: |
1998
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Authors: | Corriveau, Louis |
Published in: |
Economica. - London School of Economics (LSE). - Vol. 65.1998, 259, p. 303-25
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Publisher: |
London School of Economics (LSE) |
Saved in:
freely available
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