We study a model of endogenous growth where firms invest both in product and process innovations. Product innovations (that open up completely new product lines) satisfy the advanced wants of the rich. Subsequent process innovations (that decrease costs per unit of quality) transform the...

The existing theoretical literature on mass customization maintains that customization reduces product differentiation and intensifies price competition. In contrast, operations management studies argue that customization serves primarily to differentiate a company from its competitors....

As technological change accelerates, and mass production encompasses more sectors, their inherent inefficiencies and inequities become more prevalent in the aggregate economy. The resulting mass market economy can be described as the combination of a large scale, innovative leading sector under...