Endogenous Technological Progress and Infinite Economic Growth

Karl Farmer and Matthias Schelnast
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Matthias Schelnast: University of Graz

Chapter 6 in Growth and International Trade, 2021, pp 139-152 from Springer

Abstract: Abstract This chapter presents a neo-Schumpeterian OLG model of self-propelled growth of intermediate-product innovations and over time rising GDP rates. A one-period patent system generates monopoly rents for producers of recently innovated intermediate goods which serve together with competitively produced intermediates as inputs in final good production. The rising variety of intermediates reduces the unit cost and the price of the final good which enables the financing of an ever-increasing rate of intermediate-product innovations by the savings of younger households. Growth in the OLG model of this chapter is attributed to a continuous innovation process driven by rational choices of short-lived agents.

Keywords: Intermediate product; Profit maximization; Intermediate good; Imperfect competition; Patent system (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-3-662-62943-7_6

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