Innovation, Reallocation and Growth
| dc.contributor.author | Acemoglu, Daron | |
| dc.contributor.author | Akcigit, Ufuk | |
| dc.contributor.author | Bloom, Nicholas | |
| dc.contributor.author | Kerr, William | |
| dc.date.accessioned | 2013-06-05T20:51:28Z | |
| dc.date.available | 2013-06-05T20:51:28Z | |
| dc.date.issued | 2013-06-05 | |
| dc.identifier.uri | http://hdl.handle.net/1721.1/79066 | |
| dc.description.abstract | The standard approach to policy-making and advice in economics implicitly or explicitly ignores politics and political economy, and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be incorrect; because it ignores politics, this approach is oblivious to the impact of the removal of market failures on future political equilibria and economic efficiency, which can be deleterious. We first outline a simple framework for the study of the impact of current economic policies on future political equilibria and indirectly on future economic outcomes. We then illustrate the mechanisms through which such impacts might operate using a series of examples. The main message is that sound economic policy should be based on a careful analysis of political economy and should factor in its influence on future political equilibria. | en_US |
| dc.description.sponsorship | We thank participants in Kuznetz Lecture at Yale University and in seminars at New York University, Federal Reserve Bank of Minneapolis, North Carolina State University, Bank of Finland, University of Pennsylvania, University of Toronto Growth and Development Conference, AEA 2011 and 2012, NBER Summer Institute Growth Meeting 2012, CREI-MOVE Workshop on Misallocation and Productivity, Federal Reserve Bank of Philadelphia, and Microsoft for helpful comments. This research is supported by Harvard Business School, Innovation Policy and the Economy forum, Kauffman Foundation, National Science Foundation, and University of Pennsylvania. Douglas Hanley provided excellent research assistance in all parts of this project. The research in this paper was conducted while the authors were Special Sworn Status researchers of the US Census Bureau at the Boston Census Research Data Center (BRDC). Support for this research from NSF grant ITR-0427889 [BRDC] is gratefully acknowledged. Research results and conclusions expressed are the authors’ and do not necessarily reflect the views of the Census Bureau or NSF. This paper has been screened to ensure that no confidential data are revealed. | en_US |
| dc.language.iso | en_US | en_US |
| dc.relation.ispartofseries | MIT Department of Economics Working Paper Series;13-10 | |
| dc.subject | entry | en_US |
| dc.subject | growth | en_US |
| dc.subject | industrial policy | en_US |
| dc.subject | innovation | en_US |
| dc.subject | R&D | en_US |
| dc.subject | reallocation | en_US |
| dc.subject | selection | en_US |
| dc.title | Innovation, Reallocation and Growth | en_US |
| dc.type | Working Paper | en_US |
