We study a dynamic general equilibrium model where innovation takes the form of the introduction new goods, whose … production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are … substitution between goods and other parameters. Third, we show that the interplay between innovation and standardization may lead …

innovation activities. The selection of high-skill managers is more important for innovation activities. As the economy … investments, but little selection. Closer to the world technology frontier, there is a switch to an innovation-based strategy with …