Catch-up and fall-back through innovation and imitation

Jess Benhabib, Jesse Perla, Christopher Tonetti

    Research output: Contribution to journalArticlepeer-review

    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 languageEnglish (US)
    Pages (from-to)1-35
    Number of pages35
    JournalJournal of Economic Growth
    Volume19
    Issue number1
    DOIs
    StatePublished - Mar 2014

    Keywords

    • Catch-up
    • Endogenous growth
    • Fall-back
    • Imitation
    • Innovation
    • Technology diffusion

    ASJC Scopus subject areas

    • Economics and Econometrics

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