The Importance of Industrial Policy in Quality-Ladder Growth Models
AbstractWe extend the class of quality-ladder growth models (Grossman and Helpman, 1991, Segerstrom, 1998 and others), to encompass an economy with asymmetric fundamentals. In contrast to the standard framework, in our model industries may differ in terms of their innovative potential (quality jumps and arrival rates) and consumers' preferences. This extension allows us to bring industrial policy back into the realm of the growth policy debate. We first show that it is always possible to raise the long-run growth rate and the social welfare of the economy through a costless tax/subsidy scheme reallocating resources towards the relatively more promising industries. We then prove that, in certain economies, even a mere profit taxation policy increases economic growth and social welfare above the laissez-faire.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.
Volume (Year): 8 (2008)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.degruyter.com
Other versions of this item:
- Giordani, Paolo E. & Zamparelli, Luca, 2007. "The Importance of Industrial Policy in Quality-Ladder Growth Models," MPRA Paper 6142, University Library of Munich, Germany.
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Smulders, J.A. & Klundert, T.C.M.J. van de, 1995.
"Imperfect competition, concentration and growth with firm-specific R&D,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-153407, Tilburg University.
- Smulders, Sjak & van de Klundert, Theo, 1995. "Imperfect competition, concentration and growth with firm-specific R & D," European Economic Review, Elsevier, vol. 39(1), pages 139-160, January.
- Grossman, G.M. & Helpman, E., 1989.
"Quality Ledders In The Theory Of Growth,"
148, Princeton, Woodrow Wilson School - Public and International Affairs.
- Paul Segerstrom & Elias Dinopoulos, 1999.
"A Schumpeterian Model of Protection and Relative Wages,"
American Economic Review,
American Economic Association, vol. 89(3), pages 450-472, June.
- Dinopoulos, Elias & Segerstrom, Paul, 1996. "A Schumpeterian Model of Protection and Relative Wages," Working Paper Series 471, Research Institute of Industrial Economics.
- Roeger, Werner, 1995. "Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 316-30, April.
- Dinopoulos, Elias & Thompson, Peter, 1998. " Schumpeterian Growth without Scale Effects," Journal of Economic Growth, Springer, vol. 3(4), pages 313-35, December.
- Jones, Charles I, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 495-525, May.
- Robert E. Hall, 1988.
"The Relation Between Price and Marginal Cost in U.S. Industry,"
NBER Working Papers
1785, National Bureau of Economic Research, Inc.
- Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-47, October.
- Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
- Chol-Won Li, 1998.
"Endogenous Growth Without Scale Effects: Comment,"
9819, Business School - Economics, University of Glasgow.
- Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
- Guido Cozzi & Giammario Impullitti, . "Technology Policy and Wage Inequality," Working Papers 2008_23, Business School - Economics, University of Glasgow, revised Oct 2006.
- Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
- Lei Ji, 2013. "Cross-industry tfp growth differences with asymmetric industries and the endogenous market structure," Documents de Travail de l'OFCE 2013-17, Observatoire Francais des Conjonctures Economiques (OFCE).
- Paolo Giordani & Luca Zamparelli, 2011.
"On robust asymmetric equilibria in asymmetric R&D-driven growth economies,"
Decisions in Economics and Finance,
Springer, vol. 34(1), pages 67-84, May.
- Giordani, Paolo E. & Zamparelli, Luca, 2009. "On Robust Asymmetric Equilibria in Asymmetric R&D-Driven Growth Economies," MPRA Paper 17171, University Library of Munich, Germany.
- Paolo E. Giordani & Luca Zamparelli, 2009. "On Robust Asymmetric Equilibria in Asymmetric R&D-Driven Growth Economies," Working Papers CELEG 0903, Dipartimento di Economia e Finanza, LUISS Guido Carli.
- Felipa de Mello-Sampayo & Sofia de Sousa-Vale & Francisco Camões & Orlando Gomes, 2012.
"Protectionism under R&D policy: innovation rate and welfare,"
Journal of Economic Studies,
Emerald Group Publishing, vol. 39(1), pages 106-124, January.
- Felipa de Mello-Sampayo & Sofia de Sousa-Vale & Francisco Camões & Orlando Gomes, 2010. "Proteccionism under R&D Policy: Innovation Rate and Welfare," Working Papers Series 1 ercwp0210, ISCTE-IUL, Business Research Unit (BRU-IUL).
- Simon Wiederhold, 2009. "Government Spending Composition in a Simple Model of Schumpeterian Growth," Jena Economic Research Papers 2009-101, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.