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The endogenous innovation research program is one of the most important theoretical agendas in modern growth theory … suggest a scale effect that seems inconsistent with the data. We argue that existing empirical tests of the theory do not … formulation directly tests the prediction of scale effects and the relative importance of agglomeration effects versus congestion …
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We consider an R&D-driven endogenous growth model in which innovation is risky and agents are risk averse. Growth is determined by the occupational choice of agents who can either work in production for a wage or become entrepreneurs. In this context, we examine the impact of redistributive...
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We investigate optimal tax policy in a Romer-style endogenous growth model. We derive formulas for the optimal tax rates on capital, labor, and innovation on a balanced growth path. We compute the balanced growth path and the transition to it with optimal policy for a range of parameter values....
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congestion-sensitive content; however, this creates more congestion for other existing content. By contrast, if capacity is …
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