Vertical diversity and equilbrium growth

Satya P. Das ()
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Satya P. Das: Indian Statistical Institute, New Delhi

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: This paper examines the effect of an increase in vertical diversity in workers' skill on the long run growth rate of an economy. It uses a two-secror model where the techonology of the consumption-good sector is supermodular and that of the R&D sector is submodular. By adopting Grossman and Maggi's(2000) model to a framework of growth based on R&D, it shows first that diversity is condutive to growth. As the main innovation, communication gap is introduced among workers. It is then shown that growth may not be increasing with diversity. There may be an inverse-U shaped relationship.

Keywords: Diversity; talent distribution; supermodular technology; submodular technology; growth; skill; R&D; innovations (search for similar items in EconPapers)
JEL-codes: J31 O2 O3 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004-06
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Persistent link: https://EconPapers.repec.org/RePEc:alo:isipdp:04-18

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