The creation of the European Monetary Union has led to a substantial increase in the discussion of the importance of fiscal discipline and adequate fiscal rules in such a monetary union. The “European” solution has been challenged by many authors and politicians: among the main questions...

Innovation is the building block of competitive advantages and thus economic policies are increasingly focused on creating stimulus to increase a country’s innovative performance and growth potential, namely through knowledge accumulation in general and R&D in particular. In this context,...

We develop a multi-sector model of R&D-driven endogenous growth that merges the expanding-variety with the quality-ladders mechanism. The mechanism of expanding variety provides the flow of new firms (new product lines), whilst the mechanism of quality ladders provides the accumulation of...

The Perpetual Inventory Model (PIM) assumes that, in each period, an arbitrary constant fraction of technological-knowledge stock is lost. By connecting the aggregate resource constraint with firms’ market value, we give a theoretical background to the PIM by showing that the...

This paper studies a non-degenerate price distribution for the homogeneous good within a model of endogenous directed technical change. A probability density function is analytically derived and shown to be related to the technology and innovation parameters of the model.

This paper develops a tournament model of horizontal and vertical R&D under a lab-equipment specification. A key feature is that the overall growth rate is endogenous, as the splitting of the growth rate between the intensive and the extensive margin is itself endogenous. This setup gives rise...

This paper studies the firm size distribution arising from an endogenous growth model of quality ladders with expanding variety. The probability distribution function of a given cohort of firms is a Poisson distribution that converges asymptotically to a normal of log size. However, due to firm...

We develop an extended directed technological change model with R&D driven growth to analyze the growth rate, technological-knowledge bias, skill premium and industrial structure, assuming: (i) complementarities between intermediate goods in production, and (ii) internal costly investment. We...

We revisit the issue of self-fulfilling “waves of enthusiasm” as stationary rational expectations equilibrium outcomes in endogenous-growth models that merge the quality-ladders with the expanding-variety mechanism. By considering a lab-equipment specification with vertical-innovation...

This paper builds an endogenous growth model of directed technical change with vertical and horizontal R&D and scale effects at the industry level to study an analytical mechanism that is consistent with the observed cross-country pattern in the skill structure, the technology structure and...