The Importance of Industrial Policy in Quality-Ladder Growth Models

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dc.contributor.author GIORDANI, Paolo
dc.contributor.author ZAMPARELLI, Luca
dc.date.accessioned 2008-02-01T13:48:43Z
dc.date.available 2008-02-01T13:48:43Z
dc.date.issued 2008
dc.identifier.citation The B.E. Journal of Macroeconomics, 2008, 8, 1, Article 1 en
dc.identifier.uri http://hdl.handle.net/1814/7937
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: http://www.bepress.com/bejm/vol8/iss1/art1 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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