Frontmatter -- Contents -- Contributors -- Preface -- Acknowledgments -- Part I INTRODUCTION -- 1 Introduction and Overview -- 2 Innovation in an Historical Perspective: Tales of Technology and Evolution -- Part II COUNTRY STUDIES -- 3 The United States -- 4 Japan -- 5 Germany -- 6 France -- 7...

In a general equilibrium product-cycle model, lower trade barriers increase Southern purchasing power, which lifts long-run growth by increasing the profit from innovation. In the short run, factors of production must be reallocated inside firms, which lowers the opportunity cost of innovation,...