The Importance of Industrial Policy in Quality-Ladder Growth Models

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Show simple item record GIORDANI, Paolo ZAMPARELLI, Luca 2008-02-01T13:48:43Z 2008-02-01T13:48:43Z 2008
dc.identifier.citation The B.E. Journal of Macroeconomics, 2008, 8, 1, Article 1 en
dc.description.abstract We extend the class of quality-ladder growth models (Grossman and Helpman, 1991, Segerstrom, 1998 and others), to encompass an economy with asymmetric fundamentals. In contrast to the standard framework, in our model industries may differ in terms of their innovative potential (quality jumps and arrival rates) and consumers' preferences. This extension allows us to bring industrial policy back into the realm of the growth policy debate. We first show that it is always possible to raise the long-run growth rate and the social welfare of the economy through a costless tax/subsidy scheme reallocating resources towards the relatively more promising industries. We then prove that, in certain economies, even a mere profit taxation policy increases economic growth and social welfare above the laissez-faire. Article available at: en
dc.language.iso en en
dc.publisher Berkeley Electronic Press en
dc.title The Importance of Industrial Policy in Quality-Ladder Growth Models en
dc.type Article en
dc.neeo.contributor GIORDANI|Paolo|aut|
dc.neeo.contributor ZAMPARELLI|Luca|aut|

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