A number of plausible theories offer explanations for the propensity of many young industries to undergo a shakeout phase, during which the number of firms declines sharply in the face of continued rising output. However, none of the theories considers the role of labor market sorting. This...

The last fifty years have witnessed large secular increases in educational attainment and R&D intensity. The fact that these trends have not stimulated more rapid income growth has been a persistent puzzle for growth theorists. We construct a model of endogenous economic growth in which income...

Persistent trends in R&D intensity and educational attainment, in conjunction with the absence of any trend in per capita income growth, are inconsistent with the predictions of most growth models. Jones (2002) has made a strong point that the data are consistent with out-of-steady state...