and "radical" innovations by entrants. The government levies taxes on labor income and corporate profits and supplies …, incumbents. With these models at hand, we provide new insights on the interplay of innovation dynamics and fiscal policy …

"radical" innovations by entrants. The government finances its expenditure stream by labor income and corporate taxes and … development (R&D) by entrants and, if applicable, incumbents. Regardless of the innovation structure, an increase in consumption … economic growth alongside a welfare loss in the homogeneous innovation model. However, in the heterogeneous innovation model …

enables the model to replicate the empirically rather moderate correlation between the R&D innovation probabilities of …

and "radical" innovations by entrants. The government levies taxes on labor income and corporate profits and supplies …, incumbents. With these models at hand, we provide new insights on the interplay of innovation dynamics and fiscal policy. …

implications of this type of heterogeneity by assuming that incumbents, i.e. current monopolists engaging in incremental innovation … innovation, in a two-country endogenous growth general equilibrium model. In particular, this assumption allows the model to … break the perfect correlation between incumbents' and entrants' innovation probabilities and to match the empirical …