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Innovation and growth: supply and demand factors in the US expansion

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  • Annamaria Simonazzi

Abstract

It is widely held that the social-economic context of the United States, characterised by labour market flexibility and deregulation of product and capital markets, lies at the basis of the innovative capacity displayed by the country’s productive system in the ‘90s, thus accounting for the growth differential with Europe. Starting from a different interpretative model of innovation and growth, the paper focuses on both supply (institutional and technological) and demand factors. It is argued that, when their interaction is duly taken into account, there is no strong evidence that more deregulated labor and product markets are among the factors allowing for US growth. In accordance with the view that there is no single road to innovation and growth, this leaves room for exploration and implementation of policies that might reconcile innovation and growth with the safeguard of fundamental features of Europe’s social institutions.

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Bibliographic Info

Paper provided by University of Rome La Sapienza, Department of Public Economics in its series Working Papers with number 53.

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Length: 31
Date of creation: Feb 2002
Date of revision:
Handle: RePEc:sap:wpaper:wp53

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Keywords: innovation; growth; deregulation; macroeconomic policies.;

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