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 … substitution between goods and other parameters. Third, we show that the interplay between innovation and standardization may lead …

exchanging ideas, solving work-related problems, generating new knowledge …

) from upper-tail knowledge. As a proxy for the historical presence of knowledge elites, we use city-level subscriptions to … firm survey from the 1840s, we shed light on the mechanism: upper-tail knowledge raised productivity in innovative …