This paper develops a dynamic general equilibrium model of economic growth. The model has a steady-state equilibrium in which some firms devote resources to copying these products. Rates of both innovation and imitation are endogenously determined on the basis of the outcomes of R&D races between firms. Innovation subsidies are shown to unambiguously promote economic growth. Welfare is enhanced, however, only if the steady-state intensity of innovative effort exceeds a critical level. Copyright 1991 by University of Chicago Press.
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Volume (Year): 99 (1991) Issue (Month): 4 (August) Pages: 807-27 Download reference. The following formats are available: HTML
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Handle: RePEc:ucp:jpolec:v:99:y:1991:i:4:p:807-27
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