In this paper I consider the 1991 Grossman-Helpman model which analyses the role of innovation on growth. The model …-Helpman model unchanged, I analyse the influence of the rate of innovation on three variables: the rate of growth of final output …

innovation to economic growth. This paper is based on the theorem that was built up in the paper that I wrote in 2007 entitled …

international diffusion through trade. Fitting the model to data on innovation, productivity, and trade in varieties, I find that …