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An inverted-U relationship between product market competition and Growth in an extended romerian model : A comment

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Bianco, Dominique

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Abstract

This paper shows that the results of Bucci (2005) depend critically on the assumption that there are no difference between the intermediate goods share in final output, the returns of specialization and the degree of market power of monopolistic competitors. In this paper, we disentangle the market power parameter from the intermediate goods share in final output and the returns to specialization. The main result of this paper is the death of the inverted-U shape relationship between competition and growth. Indeed, we find a decreasing relationship between competition and growth which is due to the composition of two negative effects on growth : resource allocation and Schumpeterian effects.

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File URL: http://mpra.ub.uni-muenchen.de/4492/
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File URL: http://mpra.ub.uni-muenchen.de/9470/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4492.

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Date of creation: 13 Jul 2007
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Handle: RePEc:pra:mprapa:4492

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Related research
Keywords: Endogenous growth Horizontal differentiation Technological change Imperfect competition

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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References listed on IDEAS
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.:
  1. Benassy, Jean-Pascal, 1998. "Is there always too little research in endogenous growth with expanding product variety?," European Economic Review, Elsevier, vol. 42(1), pages 61-69, January. [Downloadable!] (restricted)
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  2. Alberto Bucci & Carmelo Parello, 2006. "Horizontal Innovation-Based Growth and Product Market Competition," UNIMI - Research Papers in Economics, Business, and Statistics 1032, Universitá degli Studi di Milano. [Downloadable!]
  3. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
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  4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Bianco, Dominique, 2007. "R&D, Competition and Growth with Human Capital Accumulation : A Comment," MPRA Paper 5243, University Library of Munich, Germany. [Downloadable!]
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