Most growth theorists agree that understanding the economics of innovation and technological change is central to understanding why some countries are richer and/or grow faster than other countries. The driving force behind recent developments in endogenous innovation models of growth is a...

This note looks at Smith's critiques of bounties (read "subsidies") on exports. Smith's analysis of bounties foreshadowed the basic trade policy framework of distortions and noneconomic objectives. While Smith did not develop the theory of distortions, he captured the logic of the theory of...

The endogenous innovation research program is one of the most important theoretical agendas in modern growth theory. Progress, however, has been slowed due to an apparent empirical anomaly. In their simplest and most appealing forms the models suggest a scale effect that seems inconsistent with...

Adam Smith's theory of the gains from trade has caused controversy among economic theorists. Throughout much his work Smith argues that markets efficiently allocate resources. Smith's treatment of the gains from trade, however, is considered inconsistent with this system of natural liberty. This...