We develop a dynamic stochastic general-equilibrium model of science, education and innovation to explain the simultaneous emergence of innovation clusters and stochastic growth cycles. Firms devote human-capital resources to research activities in order to invent higher quality products. The...

This paper develops an extended version of the quality-ladder model by allowing for heterogeneous markets. Based on this model, it presents an empirical analysis of innovation-based growth at the market level using a technometric measurement concept. It can be shown that a growth-promoting...

This paper presents a general-equilibrium model of endogenous skilled-biased technological change and matching unemployment in a disaggregated economy. We simultaneously endogenise both the direction and pace of technological change as well as the unemployment rates. We show that an increase in...