The paper looks at the macrowonornic implications of some recent dwelopmetlts in the theory of industrial organization. In a Kalwkian model, firms are assumed IO invest heavily early in the procluct lift cycle, thus creating dective &mad. Conwrsely, it is assumed that late in the product life cyde firms honrd, waiting for new prodrwts in which to invest. IJndcr reasonable conditions, the rates ...