Innovation and growth in the Grossman-Helpman’s model with increasing returns: a note.

Guarini, Giulio (2009): Innovation and growth in the Grossman-Helpman’s model with increasing returns: a note.

Abstract

In this paper I consider the 1991 Grossman-Helpman model which analyses the role of innovation on growth. The model assumes constant returns to scale. I intend to show what happen in this model if I assume strong increasing returns. In particular, under the assumption of increasing returns of capital but leaving all other main features of the Grossman-Helpman model unchanged, I analyse the influence of the rate of innovation on three variables: the rate of growth of final output, the level of prices of final output and the rate of investment.

• Item Type: MPRA Paper
• Language: English
• Keywords: Grossman-Helpman model, growth, innovation, increasing returns to scale
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives

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