A useful book full of careful measurement of the incentives, institutions, and causal flows in the knowledge economy. Shows both the importance of the knowledge economy (now denied by fools on Wall Street) and how sound economic analysis applies to it (recently denied by the same fools).
Timothy Bresnahan, Landau Professor of Technology in the Economy and Chair, Department of Economics, Stanford University
An engaging presentation of a major research program on the effects of competition on economic growth. The book is an essential guide for sorting out the package of competition policies—antitrust, patent protection, R&D subsidies—that best serve the economy.
Robert J. Barro, Paul M. Warburg Professor of Economics, Harvard University
Aghion and Griffith's new book should be required reading for anyone interested in drivers of economic growth in the modern economy. Moving smoothly between leading edge economic theory and the very best of recent empirical research, the authors not only make a compelling case for the importance of developing a nuanced understanding of the relationship between market structure and innovation but also generate a number of compelling conclusions with broad implications for public policy. This is an important book that deserves to be widely read.
Rebecca Henderson, Eastman Kodak LFM Professor of Management, Sloan School, MIT
Aghion and Griffith explain the heretofore confused relationships between competition and innovation with exemplary analytic clarity. Their empirical evidence on competition and economic growth shows the value of blending carefully argued theory with thoughtfully assembled statistics.
Timothy Bresnahan, Landau Professor of Technology in the Economy and Chair, Department of Economics, Stanford University
Whereas the president of France and the chancellor of Germany believe that national or European 'champions,' assisted by the state and unfettered by competition policy, are best for providing innovations at the frontiers of science and technology and for economic growth, the reader of this book will learn that the facts are different. At the technological frontier, innovations are driven by competition and by the desire to escape competitive pressures. With imaginative theoretical modelling and sophisticated empirical analysis, Aghion and Griffith solve outstanding puzzles and show that the effects of competition on innovations and growth depend on proximity to the technological frontier. This work provides the standard for future research.
Martin Hellwig, Max Planck Institute for Research on Collective Goods, Bonn
