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Innovation and labour mobility

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  • Rajit Biswas

Abstract

The present model introduces labour mobility in an otherwise standard model of innovation and imitation. As in Grossman and Helpman (Innovation and growth in the global economy. MIT Press, Cambridge, 1992 ) a wide-gap and a narrow gap steady state equilibrium is characterized. It is shown that there can be multiplicity of equilibrium in the wide gap case. Interestingly, free labour mobility causes the growth rate to be identical for both the wide gap and the narrow gap case. A strengthening of intellectual property rights reduces the global growth rate of the economy both in the wide gap and narrow gap equilibrium. In case of the unique narrow gap equilibrium, stronger property rights reduces the rate of imitation unambiguously, but the effect of stronger property rights remains ambiguous in case of wide gap equilibrium. Also subsidy by North to innovation, in a Narrow gap equilibrium, has no effect on the rate of imitation or on the global growth rate. Copyright Springer-Verlag Wien 2015

Suggested Citation

  • Rajit Biswas, 2015. "Innovation and labour mobility," Journal of Economics, Springer, vol. 116(3), pages 229-246, November.
    • Handle: RePEc:kap:jeczfn:v:116:y:2015:i:3:p:229-246
    DOI: 10.1007/s00712-015-0437-5
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    References listed on IDEAS

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    Cited by:

    1. Adolfo Cristóbal Campoamor, 2019. "Gradual trade liberalization in a North–South model of the product cycle," Journal of Economics, Springer, vol. 127(3), pages 265-292, August.

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    More about this item

    Keywords

    Innovation; Imitation; Skilled labour mobility; Intellectual property rights; Subsidies; Growth; F12; F13; O3;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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