Quality Ladders in the Theory of Growth
The authors develop a model of repeated product improvements in a continuum of sectors. Each product follows a stochastic progression up a quality ladder. Progress is not uniform across sectors, so an equilibrium distribution of quality evolves over time. But the rate of aggregate growth is constant. The growth rate responds to profit incentives in the R&D sector. The authors explore the welfare properties of the model. Then they relate their approach to an alternative one that views product innovation as a process of generating an ever-expanding range of horizontally differentiated products. Finally, the authors apply the model to issues of resource accumulation and international trade. Copyright 1991 by The Review of Economic Studies Limited.
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Volume (Year): 58 (1991)
Issue (Month): 1 (January)
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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.:
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