Abstract
Will fast growing emerging economies sustain rapid growth rates until they "catch-up" to the technology frontier? Are there incentives for some developed countries to free-ride off of innovators and optimally "fall-back" relative to the frontier? This paper models agents growing as a result of investments in innovation and imitation. Imitation facilitates technology diffusion, with the productivity of imitation modeled by a catch-up function that increases with distance to the frontier. The resulting equilibrium is an endogenous segmentation between innovators and imitators, where imitating agents optimally choose to "catch-up" or "fall-back" to a productivity ratio below the frontier.
Original language | English (US) |
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Pages (from-to) | 1-35 |
Number of pages | 35 |
Journal | Journal of Economic Growth |
Volume | 19 |
Issue number | 1 |
DOIs | |
State | Published - Mar 2014 |
Keywords
- Catch-up
- Endogenous growth
- Fall-back
- Imitation
- Innovation
- Technology diffusion
ASJC Scopus subject areas
- Economics and Econometrics