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Growth with Quality-Improving Innovations: An Integrated Framework

In: Handbook of Economic Growth

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  • Aghion, Philippe
  • Howitt, Peter

Abstract

In this chapter we argue that the endogenous growth model with quality-improving innovations provides a framework for analyzing the determinants of long-run growth and convergence that is versatile, simple and empirically useful. Versatile, as the same framework can be used to analyze how growth interacts with development and cross-country convergence and divergence, how it interacts with industrial organization and in particular market structure, and how it interacts with organizations and institutional change. Simple, since all these aspects can be analyzed using the same elementary model. Empirically useful, as the framework generates a whole range of new microeconomic and macroeconomic predictions while it addresses empirical criticisms raised by other endogenous growth models in the literature.

Suggested Citation

  • Aghion, Philippe & Howitt, Peter, 2005. "Growth with Quality-Improving Innovations: An Integrated Framework," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 2, pages 67-110 Elsevier.
  • Handle: RePEc:eee:grochp:1-02
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    References listed on IDEAS

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    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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