Innovative Change, Dynamic Market Allocation and Long-Term Stability of Economic Growth
AbstractMarket competition is central to innovative activity, the diffusion process and macro-economic productivity growth. Productivity growth at all levels comes about through institutional reconfiguration in response to the ongoing market process. Stable and sustained long-term growth in output requires the continuous creation of new technological and commercial solutions to production and marketing problems and exits of outmoded institutions. What is needed, in short, is a continuous turnover of monopoly rents that preserves diversity of economic structure. This means, most importantly, that innovative activity or technical change at the micro market level cannot be treated as an exogenous force, independent of the market process. Hence, discussion of socially optimal choices of technology becomes irrelevant.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 156.
Length: 48 pages
Date of creation: Aug 1986
Date of revision:
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Innovation; growth; institutional change; optimal choice; micro-to-macro model;
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