4 research outputs found
Fauna of New England, 8. List of the pisces,
This paper analyzes the normative side of an R&D growth model in which market structure and growth are jointly determined in the equilibrium of a one-sector economy under monopolistic competition. We find that a distortion in the allocation of R&D, namely the presence of technological spillovers between firms, generates two market failures: insufficient growth and excessive entry of firms. We show that this result is driven by the interplay between market structure and growth. A simple tax/subsidy scheme to support the efficient solution is proposed