Catch-up and Fall-back through Innovation and Imitation
Jess Benhabib (),
Jesse Perla () and
Christopher Tonetti ()
No 18091, NBER Working Papers from National Bureau of Economic Research, Inc
Will fast growing emerging economies sustain rapid growth rates until they "catch-up" to the technology frontier? Are there incentives for some developed countries to free-ride off of innovators and optimally "fallback" relative to the frontier? This paper models agents growing as a result of investments in innovation and imitation. Imitation facilitates technology diffusion, with the productivity of imitation modeled by a catch-up function that increases with distance to the frontier. The resulting equilibrium is an endogenous segmentation between innovators and imitators, where imitating agents optimally choose to "catch-up" or "fall-back" to a productivity ratio below the frontier.
JEL-codes: O14 O30 O31 O33 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-ino
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Published as Jess Benhabib & Jesse Perla & Christopher Tonetti, 2014. "Catch-up and fall-back through innovation and imitation," Journal of Economic Growth, Springer, vol. 19(1), pages 1-35, March.
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