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Catch-up and fall-back through innovation and imitation

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  • Jess Benhabib

    ()

  • Jesse Perla

    ()

  • Christopher Tonetti

    ()

Abstract

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 “fall-back” 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. Copyright Springer Science+Business Media New York 2014

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Bibliographic Info

Article provided by Springer in its journal Journal of Economic Growth.

Volume (Year): 19 (2014)
Issue (Month): 1 (March)
Pages: 1-35

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Handle: RePEc:kap:jecgro:v:19:y:2014:i:1:p:1-35

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Web page: http://www.springerlink.com/link.asp?id=102931

Related research

Keywords: Endogenous growth; Technology diffusion; Innovation; Imitation; Catch-up; Fall-back; O14; O30; O31; O33; O40;

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Cited by:
  1. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2013. "Theory and Empirics of Stage-Dependent Intellectual Property Rights," Economics Working Paper Series 1306, University of St. Gallen, School of Economics and Political Science.
  2. Ufuk Akcigit & Murat Alp Celik & Jeremy Greenwood, 2013. "Buy, Keep or Sell: Economic Growth and the Market for Ideas," PIER Working Paper Archive 13-069, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  3. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2014. "Stage-dependent intellectual property rights," Journal of Development Economics, Elsevier, vol. 106(C), pages 239-249.

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