The Analysis of Innovation in Innovation-Driven Growth Models
Revue Française d'Economie, Vol. 14, No. 2, pp. 189-221
Posted: 9 Mar 2008 Last revised: 11 Dec 2013
Date Written: 1999
As major determinants of economic activity, innovation and research and development activities are major issues in the analysis of growth. Focusing on microeconomic aspects of innovation within the endogenous growth literature helps reconsidering the sources and mechanisms of growth. This article studies the analysis of innovation within endogenous growth models by reconsidering the standard decomposition based on the nature of technological progress, namely an increase in the variety or quality of goods. In the light of recent contributions on public policy analysis, these theoretical models are analysed within the debate on market structures and the nature of the discovery process. The technological adoption process turns out to be enriched, and competition, traditionally viewed as detrimental, recovers relevancy in the analysis of growth.
Keywords: Innovation, Growth, Horizontal Differentiation, Vertical Differentiation
JEL Classification: O3, O4, L1
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