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Phases of Imitation and Innovation in a North-South Endogenous Growth Model

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Listed:
  • David Currie
  • Paul Levine
  • Joeseph Pearlman
  • Michael Chui

Abstract

In this paper, we develop a North-South endogenous growth model to examine three phases of development in the South: imitation of Northern products, imitation and innovation and finally, innovation only. In particular, the model has the features of catching up (and potentially overtaking) which are of particular relevance to the Pacific Rim economies. We show that the possible equilibria depend on cross-country assimilation effects and the ease of imitation. We then apply the model to analyse the impact of R&D subsidies. There are some clear global policy implications which emerge from our analysis. Firstly, because subsidies to Southern innovation benefit the North as well, it is beneficial to the North to pay for some of these subsidies. Secondly, because the ability of the South to assimilate Northern knowledge and innovate depends on Southern skills levels, the consequent spillover benefits on growth make the subsidising of Southern education by the North particularly attractive.

Suggested Citation

  • David Currie & Paul Levine & Joeseph Pearlman & Michael Chui, 1996. "Phases of Imitation and Innovation in a North-South Endogenous Growth Model," School of Economics Discussion Papers 9602, School of Economics, University of Surrey.
  • Handle: RePEc:sur:surrec:9602
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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