Knowledge Diffusion

Gray, Elie

Knowledge Diffusion - 2011.


75

This paper proposes a Schumpeterian growth model generalizing the existing theory: we exploit the Salop (1979) formalization of circular product differentiation to take into account the fact that knowledge can diffuse variously among R&D sectors, ranging from local to global diffusion. We explain how this shapes the pools of knowledge in which sectors draw from to produce innovations. Introducing explicitly knowledge diffusion allows us to shed a new light on several questions: how to explain that growth can be over or sub-optimal? Patent or secrecy: how should monopolies be protected? Where does the property of scale effects come from? Classification JEL: O31, O33, O41

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