In this paper we examine how to account for growth when new inputs are being created. In particular, we obtain a decomposition of growth into that due to a higher quantity of existing inputs, and that due to a greater range of inputs. This decomposition is first obtained for a single firm, with...

Export-platform foreign direct investment in which the affiliate’s output is (largely) sold in third markets rather than in the parent or host markets has received empirical attention recently, but little theoretical analysis. This Paper is an attempt to make some sense of this phenomenon. We...

Gains from productivity and knowledge transmission arising from the presence of foreign firms have received a good deal of empirical attention, but theoretical micro-foundations for this mechanism are limited. Here we develop a dynamic model in which foreign experts may train domestic workers...

Applied general-equilibrium (AGE) models have often made compromises to circumvent difficult modeling problems. One of these is avoiding endogenous zeros, ruling out important questions. Traditional perfect competition models: when do technologies or trade links switch from active to inactive or...

Despite economic theory and empirical literature that have shown that wide availability of business services contributes significantly to productivity gains and growth, economic modelers have been slow to meaningfully incorporate services into their models. This paper employs a 52-sector, small,...