Innovation and technological progress are the key determinants of long-run economic growth and welfare. Therefore, an … important question is, how can public policy encourage more innovation? In this chapter, I review some of the empirical findings … from various recent studies on innovation and firm dynamics that can shed light on the design of innovation policy. The …

innovation. in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more … technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though …