This survey reviews the literature on firm dynamics, innovation and growth aiming to better understand the main channels through which innovation affects the performance of modern economies. Since innovations fundamentally diffuse through a complex process of firm and product creation and...

Economic analysts have used trends in total factor productivity (TFP) to evaluate the effectiveness with which economies are utilizing advances in technology. However, this measure is problematic on several different dimensions. First, the idea that it is possible to separate out the relative...