National productive structure and innovative dynamics: finding the (endogenous) path to convergence

• Autor(a) principal: Cerdeira, Jorge
• Data de Publicação: 2008
• Outros Autores: Rebelo, Luís Pina
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/25293
• topic: Stochastic innovation; Transition economies; Growth; Technology; Diffusion; Convergence

We extend the model presented in Barro and Sala-i-Martin (1997) by allowing for two types of economies - more developed and in transition to European Union integration - to both imitate and innovate varieties of intermediate goods. Besides depending on research and development expenditures, we also allow for the stochastic nature of innovation by making it also dependent on a random component. We do this by Monte Carlo simulation, using a Box-Muller process, and solve a three di erential equation model by using numerical methods. Two situations are presented: a leading economy with greater institutions and more labour than the transition economy versus a situation where an institutional advance is given to the transition economy.