Profitable Unproductive Innovations
María J. Alvarez-Peláez () and
Christian Groth ()
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María J. Alvarez-Peláez: Universidad de Málaga y CentrA, http://www.uma.es/inicio.html
Authors registered in the RePEc Author Service: Maria Jose Alvarez Pelaez ()
No E2003/42, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces
The present paper studies resource allocation in an expanding product variety framework à la Romer (1990). We consider the limiting case where net returns to specialization are zero and, therefore, R&D is completely useless, socially. Nevertheless, the market equilibrium involves allocation of ressources to R&D, and this wasteful allocation may take place even in a steady state.
Keywords: Research and development (R&D); Expanding product variety; Creative destruction. (search for similar items in EconPapers)
JEL-codes: O33 O41 (search for similar items in EconPapers)
Pages: 10 pages
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:cea:doctra:e2003_42
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