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'Diversity Is, Uh ..., Homogeneity': The Case of Horizontal Innovation

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  • MAN-SEOP PARK

    () (Department of Economics, Korea University)

Abstract

The literature on 'horizontal innovation' claims to analyse the cases where unbounded endogenous growth comes from an increasing variety of intermediate goods. The present paper contends that a good sample of representative models in this literature share two essential assumptions regarding production technology and that these assumptions together amount to assuming the homogeneity of various intermediate goods. In these models, there is no variety of intermediate goods to increase due to the R&D activity; what increases is a mass of a single homogeneous intermediate good.

Suggested Citation

  • Man-Seop Park, 2005. "'Diversity Is, Uh ..., Homogeneity': The Case of Horizontal Innovation," Discussion Paper Series 0505, Institute of Economic Research, Korea University.
  • Handle: RePEc:iek:wpaper:0505
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    File URL: http://econ.korea.ac.kr/~ri/WorkingPapers/w0505.pdf
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    References listed on IDEAS

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    7. Matthews, Steven A & Mirman, Leonard J, 1983. "Equilibrium Limit Pricing: The Effects of Private Information and Stochastic Demand," Econometrica, Econometric Society, vol. 51(4), pages 981-996, July.
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    More about this item

    Keywords

    horizontal innovation; Dixit-Stiglitz technology;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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