The effects of introducing new consumer goods into the economy are explored in the Solow-Cass model of exogenous growth and the Lucas human capital model of endogenous growth, both augmented by a labor-leisure choice for consumers. In the exogenous model, in steady-state, faster introduction of...

According to Baumol's model of unbalanced growth, if resources are shifting towards industries where productivity is growing relatively slowly, the aggregate productivity growth rate will slow down. This conclusion is often applied to the advanced economies, where resources are indeed shifting...

Based on a sample of 140,000 U.K. companies over the period 1989-93, this paper finds a wide dispersion of labor productivity across firms. Some dispersion is transitory: amongst surviving companies there is regression towards the mean and dispersion falls over time. However, there are...