Investment, R&D, and Long-Run Growth (Lecture Notes in Economics and Mathematical Systems) - Couverture souple

Hornung, Dietmar

Couverture souple

ISBN 10 : 3540425284 ISBN 13 : 9783540425281

Editeur : Springer, 2001

Synopsis

In the 1990s, growth theory has incorporated imperfect competition in its investigations. This innovation has proven to be seminal: Cleviating from growth models with perfect competition, the new framework featured forward- looking entrepreneurs. Firms maximize profits intertemporarily, i. e. their in- vestment leads to instantaneous sunk costs and offers flows of future profits. Firms finance this investment by launching shares. The capital market is per- fectly competitive, implying that the return on a share is equal to the return on a bond. As opposed to the capital market, the goods market is imperfectly competitive. As a result of investment, firms enjoy market power. That is, firms may acquire the capability to provide a product that is differentiated in, e. g., styling, technology, accessibility, or reputation. The launch of a dif- ferentiated product allows to capture a market niche, and successful firms may price above marginal cost. The resulting profit flows are channelled to the firms' shareholders. The introduction of monopolistic competition into growth theory is valuable: real world economies may be portrayed rather by such an imperfect competition framework than by a perfect competition approach. Starting with Romer (1990), in growth theory, modeling of imperfect competition has been notoriously bound to a focus on the impact of research and development (R&D) on economic growth. In the existing literature, growth-affecting investment is restricted to R&D investment.

Détails de l'édition

• Éditeur: Springer
• Date d'édition: 2001
• Langue: anglais
• ISBN 10: 3540425284
• ISBN 13: 9783540425281
• Reliure: Broché
• Nombre de pages: 216
• Coordonnées du fabricant: Springer Nature Customer Service Center GmbH; ProductSafety@springernature.com; ; Europaplatz 3; Heidelberg; 69115; Allemagne