The fundamental importance of economic institutions for economic growth through their impact on technological change has been argued, reconfirmed by recent empirical studies, but not examined theoretically. This paper tries to fill that gap. In the model proposed, economic growth is affected by...

After a long period of catch-up growth that began after the Second World War, France has now reached a technological frontier in many sectors of its economy. Why is it then that the French economy ranks so low in various rankings of the world's most innovative economies? Why is it so difficult...

Financial institutions affect R&D and growth through their roles as corporate control devices with respect to disciplining managers and selecting projects. For an institution which generates a soft-budget constraints problem, we show how it creates conditions for relatively low economic growth...