A Competitive Idea-Based Growth Model with Shrinking Workers' Income

Carla Marchese () and Fabio Privileggi

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: In this paper we present a model in which endogenous growth arises in competitive markets. Knowledge is described as a labor-augmenting factor used directly in the Önal goodsíproduction. Firms demand both basic non-rival knowledge contents, which are supplied jointly and inelastically with raw labor, and further contents supplied by patent holders. This fact, together with Lindahl prices for knowledge, allows competition to work, while it also implies that workersíincome share declines overtime. In a Örst version of the model with constant cost of knowledge production the Örst best is attained. In further versions of the model, in which the cost of knowledge production is allowed to change over time and externalities arise, in a decentralized economy a second best equilibrium occurs in the transitional period, while in the long run there is convergence to efficiency.

Pages: 26 pages
Date: 2014-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.est.unito.it/do/home.pl/Download?doc=/a ... 14dip/wp_15_2014.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uto:dipeco:201415

Access Statistics for this paper

More papers in Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin Contact information at EDIRC.
Bibliographic data for series maintained by Laura Ballestra () and Cinzia Carlevaris ().