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Endogenous Innovation in the Theory of Growth

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  • Gene M. Grossman
  • Elhanan Helpman

Abstract

This paper makes the case that purposive, profit-seeking investments in knowledge play a critical role in the long-run growth process. First, the authors review the implications of neoclassical growth theory and the more recent theories of 'endogenous growth.' Then they discuss the empirical evidence that bears on the modeling of long-run growth. Finally, the authors describe in more detail a model of growth based on endogenous technological progress and discuss the lessons that such models can teach us.

Suggested Citation

  • Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    • Handle: RePEc:aea:jecper:v:8:y:1994:i:1:p:23-44
    Note: DOI: 10.1257/jep.8.1.23
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.8.1.23
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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