Are Innovation-Based Endogenous Growth Models Useful?
نویسنده
چکیده
A broad and popular class of innovation-based endogenous growth models implies that the steady-state growth rate of per capita output is increasing in the steady-state inducement to innovate. This paper presents evidence that in the sample periods 18901929 and 1947-1998, the US economy can be characterized as having fluctuated around two distinct steady states. It then quantifies the relationship between the changes in the steady-state inducement to innovate and the steady-state growth rate of per capita output. The relationship appears to be weak, suggesting that innovation-based endogenous growth models do not delineate an important dimension along which the trend growth rate is endogenous. Subsidies to innovation also appear to be an unpromising way to raise the US trend growth rate. JEL Codes: O40, E32, C22
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