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-goods producers drops during recessions. We then develop a model of lumpy investment with heterogeneous firms and endogenous … equilibrium feedback accounts for the observed comovement between investment and innovation, provides a powerful propagation …
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well. By implication, policies that stimulate investment and R&D and policies that affect the size of the labor force may …
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In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...
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