Competing Engines of Growth: Innovation and Standardization / Daron Acemoglu, Gino Gancia, Fabrizio Zilibotti.

Format:

Book

Author/Creator:

Acemoglu, Daron.

Contributor:

National Bureau of Economic Research.

Gancia, Gino.

Zilibotti, Fabrizio.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15958.

NBER working paper series no. w15958

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Competing Engines of Growth

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2010.

Summary:

We study a dynamic general equilibrium model where innovation takes the form of the introduction new goods, whose production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are adapted to be produced using unskilled labor. Our framework highlights a number of novel results. First, standardization is both an engine of growth and a potential barrier to it. As a result, growth in an inverse U-shaped function of the standardization rate (and of competition). Second, we characterize the growth and welfare maximizing speed of standardization. We show how optimal IPR policies affecting the cost of standardization vary with the skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that the interplay between innovation and standardization may lead to multiple equilibria. Finally, we study the implications of our model for the skill-premium and we illustrate novel reasons for linking North-South trade to intellectual property rights protection.

Notes:

Print version record

April 2010.