We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between highand low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using...

We examine trends in the productivity of the pharmaceutical sector over the past three decades. Motivated by Ricardo's insight that productivity and rents are endogenous to demand when inputs are scarce, we examine the industry's aggregate R&D production function. Using exogenous demand shocks...

Using Danish matched employer-employee data, I compare the relative pay of men and women to their relative productivity as measured by production function estimation. I find that the gender "productivity gap" is 8 percent, implying that almost two thirds of the residual gender wage gap is due to...