Author(s): Peter Funk (2007)
Journal: Journal of Economic Theory, forthcoming
Abstract:
A perfectly competitive vintage-knowledge model of Schumpeterian growth is introduced to study the relation
between growth, technology-lifetime, entry, and productivity-dispersion.
The incentive to innovate is generated by the productivity-dispersion
(latent in traditional vintage models) between new and old plants,
rather than by monopoly rents. The model has a unique steady-state
REE with endogenous growth. The endogenous extent of entry constitutes
a buffer, dampening the effect of research-efficiency and completely
neutralizing the effect of population size or population growth rates
on per-capita income levels and growth rates. Variations of research-efficiency
lead to a negative relation between growth and vintage-lifetime and
a non-monotonic relation between growth and productivity-dispersion.
Keywords: Endogenous Growth; Productivity-Dispersion; Vintage-Model; Competition
[download pdf]