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The Romer model with monopolistic competition and general technologies

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  • Etro, Federico

Abstract

I augment the Romer model of endogenous technological progress with a general CRS production function in labor and intermediate inputs. This determines markups and profits of the innovators in function of the number of inputs. Under imperfect substitutability the economy can converge to a steady state (as under a nested CES technology), replicating the properties of neoclassical growth due to a decreasing marginal profitability of innovation, or to constant growth linear in population growth as in semi-endogenous growth models.

Suggested Citation

  • Etro, Federico, 2019. "The Romer model with monopolistic competition and general technologies," Economics Letters, Elsevier, vol. 181(C), pages 1-6.
    • Handle: RePEc:eee:ecolet:v:181:y:2019:i:c:p:1-6
    DOI: 10.1016/j.econlet.2019.04.027
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    Cited by:

    1. Etro, Federico, 2020. "Technological Foundations for Dynamic Models with Endogenous Entry," European Economic Review, Elsevier, vol. 128(C).
    2. Etro, Federico, 2023. "Technologies for endogenous growth," Journal of Mathematical Economics, Elsevier, vol. 105(C).
    3. Gilad Sorek, 2024. "Schumpeterian Growth with Variable Demand Elasticity," Auburn Economics Working Paper Series auwp2024-04, Department of Economics, Auburn University.
    4. Etro, Federico, 2019. "Monopolistic competition for the market with heterogeneous firms," Economics Letters, Elsevier, vol. 179(C), pages 9-12.

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    More about this item

    Keywords

    Endogenous growth; Technological progress; Monopolistic competition; Variable markups; Solow model;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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