Endogenous Technical Change in a Competitive Economy

  title={Endogenous Technical Change in a Competitive Economy},
  author={Martin F. Hellwig and Andreas Irmen},
  journal={J. Economic Theory},
We develop a model of endogenous growth in an economy with competitive markets. Technical change arises from the intentional actions of entrepreneurs looking for profits. Opportunities for such profits stem from inframarginal rents. This provides a counterexample to the widespread view that endogenous technical change is possible only if innovating firms can expect to reap monopoly or oligopoly rents. The model has a unique equilibrium which involves steady growth at a positive rate… CONTINUE READING

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