Intelligently allocating research effort and funds requires deciding whether to build on recent advances or on more established knowledge. When recent advances create superior opportunities for invention, their adoption as research inputs in the invention process promotes technological progress....

We explore the determinants of research specialization across countries and its consequences for relative wages. Using a dynamic Ricardian model we examine the effects of faster international technology diffusion and lower trade barriers on the incentive to innovate. In the absence of any...

New ideas no longer fuel economic growth the way they once did. A popular explanation for stagnation is that good ideas are harder to find, rendering slowdown inevitable. We present a simple model of the lifecycle of scientific ideas that points to changes in scientist incentives as the cause of...

European countries do less research than Japan and the United States. We use a quantitative multi-country growth model to ask: (i) Why is this so? (ii) Would there be any benefit to expanding research in Europe? (iii) What would various European research promotion policies do? We find that (i)...