We provide a theoretical explanation, based on Schumpeterian growth theory, for the divergence in per-capita income that has taken place between countries since the mid 19th Century, as well as for the convergence that took place between the richest countries during the second half of the 20th Century. The argument is based on the premise that technological change underwent a fundamental transf...

The Knowledge-Intensive Business Services (KIBS) sector has been growing in the US in the recent decades. KIBS are used to overcome the information friction between intermediate inputs and the input users that is generated by technology improvement. We use a Schumpeterian growth model with endogenous market structure to analyze the impacts of KIBS on economic growth and welfare. The model provi...

Over the past 15 years, much of my time has been spent developing a new generation of endogenous growth theory, together with Philippe Aghion. Our original contribution was Aghion and Howitt (1992). We have since generalized the simple model of that paper considerably and applied it to a variety of different questions. Most of what we have done is contained in our recent book (Aghion and Howitt...

Abstract This study introduces automation into a Schumpeterian growth model to explore the effects of R&D and subsidies. subsidy increases innovation but decreases share automated industries degree capital intensity in aggregate production function. Automation has opposite on these macroeconomic variables. Calibrating US data, we find that raising welfare high-skill workers low-skill owners...

The following note contains a computer simulation concerning the struggle between two companies: the first one is " the biggest zaibatsu of all " , while the second one is " small, fast, ruthless ". The model is based on a neo-Schumpeterian framework operating in a Darwinian evolutionary environment. After running the program a large number of times, two characteristics stand out: • There is al...

This paper investigates the determinants of economic growth from both a theoretical and an empirical perspective. The combines supermultiplier model with Neo-Schumpeterian framework that emphasises entrepreneurial role state. We aim to detect macroeconomic effect generated by alternative fiscal policies: generic ones more directed ‘mission-oriented’ ones. Using SVAR for US economy 1947–2018 per...