Economica · 1993 · 6.4K citations · 0 references
Social SciencesBusiness EconomicsEconomicsIndustrial OrganizationInnovationInternational EconomicsEconomic GrowthGrowth TheoryInnovation PolicyTechnological InnovationCapital Accumulation ModelsEconomic Growth DynamicsEndogenous Growth EquilibriumEndogenous Growth ModelIndustrial GrowthInnovation-driven GrowthNeoclassical Growth ModelNeoclassical Growth Theory
Traditional growth theory emphasizes the incentives for capital accumulation rather than technological progress. Innovation is treated as an exogenous process or a by-product of investment in machinery and equipment. Grossman and Helpman develop a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.