We build a micro-founded model with endogenous firm innovation and growth. This enables us to examine the forces jointly driving innovation, productivity and reallocation. We estimate this using simulated methods of moments on detailed US Census micro data on output, R&D and patenting, obtaining...

This paper argues that openness to new, unconventional and disruptive ideas has a first-order impact on creative innovations---innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation,...

This paper introduces endogenous technical change through basic and applied research in a growth model. Basic research differs from applied research in two significant ways. First, significant advances in technological knowledge come through basic research rather than applied research. Second,...

As recently shown by Hsieh and Klenow (2012), firm dynamics differ substantially across countries. While firms in the US experience substantial growth during their life-cycle, firms in developing countries, especially in India, barely expand. We present a tractable microfounded endogenous growth...

Third, I structurally estimate the theoretical model parameters using Simulated Method of Moments on Compustat firms. Finally, I use these estimated parameters to conduct a macro policy experiment to evaluate the e¤ects of a size-dependent R&D subsidy on different sized firms. In conclusion of...

This paper introduces endogenous technical change through basic and applied research in a growth model. Basic research differs from applied research in two significant ways. First, significant advances in technological knowledge come through basic research rather than applied research. Second,...

We collect original data on the degree of decentralization in several thousand firms located in the US, Europe and Asia. Specifically, we focus on the autonomy of local plant managers from their Corporate Headquarters in their decisions over hiring, investment, production and sales. We find that...

This dataset presents an opportunity to look inside every firm in the economy, understanding the details of its compensation structure. This new understanding can help us to understand the decisions they make, and can raise new and interesting questions that are not possible to address with the...

We provide a general framework for the analysis of the dynamics of institutional change (e.g., democratization), and how this interacts with (anticipated and unanticipated) changes in the distribution of political power and changes in economic structure. We focus on the Markov voting equilibria,...

intertemporal distortions.