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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.

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Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 51 (1999)
Issue (Month): 1 (January)
Pages: 60-88

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Handle: RePEc:oup:oxecpp:v:51:y:1999:i:1:p:60-88

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  1. Jones, Charles I, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(2), pages 495-525, May.
  2. Grossman, Gene M & Helpman, Elhanan, 1990. "Comparative Advantage and Long-run Growth," American Economic Review, American Economic Association, American Economic Association, vol. 80(4), pages 796-815, September.
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  4. Stokey, Nancy L, 1995. "R&D and Economic Growth," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(3), pages 469-89, July.
  5. Chou, Chien-Fu & Shy, Oz, 1991. "A Model of Technology Gap, Product Cycle, and the Process of Catching Up between the North and the South," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 67(198), pages 217-26, September.
  6. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, American Economic Association, vol. 83(5), pages 1211-19, December.
  7. Klaus Waelde, 1994. "Transitional dynamics, convergence and international capital flows in two-country models of innovation and growth," International Trade, EconWPA 9403002, EconWPA, revised 06 Apr 1994.
  8. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(2), pages 531-55, May.
  9. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, Econometric Society, vol. 61(6), pages 1247-80, November.
  10. Paul Krugman, 1989. "Is Bilateralism Bad?," NBER Working Papers 2972, National Bureau of Economic Research, Inc.
  11. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, American Economic Association, vol. 80(5), pages 1077-91, December.
  12. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(4), pages 807-27, August.
  13. Michael B. Devereux & Beverly J. Lapham, 1993. "The Stability of Economics Integration and Endogenous Growth," Working Papers, Queen's University, Department of Economics 878, Queen's University, Department of Economics.
  14. Dinopoulos, Elias & Oehmke, James F. & Segerstrom, Paul S., 1993. "High-technology-industry trade and investment : The role of factor endowments," Journal of International Economics, Elsevier, Elsevier, vol. 34(1-2), pages 49-71, February.
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