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Technology adoption, innovation policy and catching-up

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  • Perilla Jiménez, Juan R.
  • Ziesemer, Thomas

    (Macro, International & Labour Economics, Mt Economic Research Inst on Innov/Techn, RS: GSBE MORSE)

Abstract

A model is proposed where economic growth is driven by innovation along the diffusion and adoption of technology from the frontier. Business innovation investments are related to households savings, which generates equilibria with low levels of, and equilibria with high levels of, innovation. Low-level equilibria are unstable. Starting from a position with low levels of investment and innovation, increasing investments are associated with high but decreasing dependence on international technology diffusion. A major objective of policy-making is to increase investment sufficiently in the lower end to reach the high level steady state. An economic rationale is provided for the existence of productivity improving equilibria, where distance to frontier countries is reduced owing to a tax and subsidy mechanism designed to boost innovation.

Suggested Citation

  • Perilla Jiménez, Juan R. & Ziesemer, Thomas, 2022. "Technology adoption, innovation policy and catching-up," MERIT Working Papers 2022-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2022024
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    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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