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Palokangas, T. (2006). Competition and Product Cycles with Non-Diversifiable Risk. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-06-027
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Abstract
This paper analyzes the growth effects of competition in a product-cycle model where R&D firms both innovate and imitate and households are subject to non-diversifiable risk. I prove that product market competition promotes growth when the initial level of competition is high enough. In contrast to the earlier product-cycle models with diversifiable risk, I show also the following. Some positive profits are necessary for technological change. The larger the proportion of industries subject to price competition, the slower economic growth.
| Item Type: | Monograph (IIASA Interim Report) |
|---|---|
| Research Programs: | Dynamic Systems (DYN) |
| Depositing User: | IIASA Import |
| Date Deposited: | 15 Jan 2016 08:39 |
| Last Modified: | 27 Aug 2021 17:19 |
| URI: | https://pure.iiasa.ac.at/8070 |
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