Traditional growth theory emphasizes the incentives for capital accumulation rather than technological progress. Innovation is treated as an exogenous process or a by-product of investment in machinery and equipment. Grossman and Helpman develop a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
About the Authors
Gene M. Grossman is Jacob Viner Professor of International Economics and Director of the International Economics Section at Princeton University.
Elhanan Helpman is Professor of Economics at Harvard University, the Archie Sherman Chair Professor of International Economic Relations in the Eitan Berglas School of Economics at Tel-Aviv University, and a Fellow at the Canadian Institute for Advanced Research.
“A pathbreaking contribution by two of the smartest economists at the frontier of trade theory today.”
—Jagdish Bhagwati, Columbia University