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Innovation and Growth in the Grossman-Helpman's 1991 Model with Increasing Returns

Author

Listed:
  • Giulio Guarini

    (Sapienza University of Rome and Italian Ministry of Economic Development)

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.

Suggested Citation

  • Giulio Guarini, 2011. "Innovation and Growth in the Grossman-Helpman's 1991 Model with Increasing Returns," Economics Bulletin, AccessEcon, vol. 31(1), pages 147-155.
    • Handle: RePEc:ebl:ecbull:eb-10-00707
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I1-P17.pdf
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    Cited by:

    1. Marian Pompiliu Cristescu & Raluca Andreea Nerișanu, 2021. "Sustainable Development with Schumpeter Extended Endogenous Type of Innovation and Statistics in European Countries," Sustainability, MDPI, vol. 13(7), pages 1-22, March.
    2. Marian-Pompiliu Cristescu & Raluca-Andreea Nerișanu & Maria Flori & Florin Stoica & Florentina Laura Stoica, 2021. "Analysing the Stock Market as an Economic Lever, Using a Qualitative and a Quantitative Model," Mathematics, MDPI, vol. 9(19), pages 1-19, September.

    More about this item

    Keywords

    Grossman-Helpman's 1991 Model; growth; innovation; increasing returns to scale;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D2 - Microeconomics - - Production and Organizations

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