Common markets, economic growth, and creative destruction

Tapio Palokangas

Journal of Economics, 2005, vol. 86, issue 1, 57-76

Abstract: Economic integration is examined in a multi-economy Schumpeterian growth model where economies differ in their research environment, and consequently in the productivity of R&D. It is shown that economies with more or less the same productivity of R&D integrate. In equilibrium, there can be many common markets with different growth rates as well as stagnating economies with decreasing relative income. A small economy with low incentives to save can avoid stagnation, if its R&D is so productive that a common market with a positive growth rate can accept it as a member. Copyright Springer-Verlag 2005

Keywords: endogenous growth; convergence; economic integration; F15; F21; O40 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:86:y:2005:i:1:p:57-76

DOI: 10.1007/BF03051800

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