In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...

How should the productivity of research universities be measured? This task is difficult but important. The recent Research Excellence Framework in the UK, which was based on peer review, suggests that there has been a marked improvement in UK academic research in economics and in many other...