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Phases of Imitation and Innovation in a North-South Endogenous Growth Model

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  • Currie, David, et al

Abstract

A North-South endogenous growth model is developed to examine three phases of Southern development: imitation of Northern products, imitation and innovation, and innovation only. The authors show that the three phases exist as possible equilibria that depend on knowledge spillovers and the ease of imitation. Applying the model to analyze the impact of R&D subsidies, there are some clear policy implications: (1) the welfare effects of subsidies in both blocs depend crucially on the Southern phase and (2) there are circumstances where the global benefits from subsidies to the South are so substantial as to be Pareto-improving even when fully financed by the North. Coauthors are Paul Levine, Joseph Pearlman, and Michael Chui. Copyright 1999 by Royal Economic Society.

Suggested Citation

  • Currie, David, et al, 1999. "Phases of Imitation and Innovation in a North-South Endogenous Growth Model," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 60-88, January.
    • Handle: RePEc:oup:oxecpp:v:51:y:1999:i:1:p:60-88
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    References listed on IDEAS

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    1. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 807-827, August.
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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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