Innovation, Imitation, and Economic Growth

Paul S Segerstrom

Journal of Political Economy, 1991, vol. 99, issue 4, 807-27

Abstract: This paper develops a dynamic general equilibrium model of economic growth. The model has a steady-state equilibrium in which some firms devote resources to copying these products. Rates of both innovation and imitation are endogenously determined on the basis of the outcomes of R&D races between firms. Innovation subsidies are shown to unambiguously promote economic growth. Welfare is enhanced, however, only if the steady-state intensity of innovative effort exceeds a critical level. Copyright 1991 by University of Chicago Press.

Date: 1991
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Working Paper: INNOVATION, IMITATION AND ECONOMIC GROWTH (1990)
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