-run growth process. First, we review the implications of neoclassical growth theory and the more recent theories of 'endogenous …

. After linking these ideas to the induced innovation literature of the 1960s and the more recent directed technological …

Is financial innovation necessary for sustaining economic growth? To address this question, we build a Schumpeterian … innovation: they can invent better methods for screening entrepreneurs. Second, every screening process becomes less effective as … technology advances. The model predicts that technological innovation and economic growth eventually stop unless financiers …