We examine how globalization affects firms incentives to train workers. In our model, firms invest in productivity-enhancing worker training before Cournot competition takes place. When two separated product markets become integrated and are thus replaced with a market with greater demand and...

This paper describes what economists know, suspect, and guess about the underlying determinants of innovation. It evaluates the evidence and points out areas where further work is urgently needed. In many cases, no solid conclusions can be drawn. Though the reader may find this frustrating,...