Schumpeterian growth with variable demand elasticity.

Variable Demand Elasticity preferences are introduced into a canonical two‐sector R&D model. The departure from the traditional CES specification yields novel growth dynamics: for a sufficiently high population growth rate, a semi‐endogenous balanced growth path ("BGP") of drastic innovation is char...

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Published in:Economic Inquiry Vol. 63; no. 4; pp. 1110 - 1127
Main Author: Sorek, Gilad
Format: Article
Published: Wiley-Blackwell Oct2025
Subjects:
Online Access:View this record in EBSCOhost
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      dt: Oct2025
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        atl: Schumpeterian growth with variable demand elasticity.
      aug:
        au: Sorek, Gilad
        affil: Department of Economics, Auburn University, Auburn Alabama, , USA
      su:
        Economic expansion
        Elasticity (Economics)
        Technological innovations
        Endogenous growth (Economics)
        Research & development
        Creative destruction
      sug:
        subj:
          Economic expansion
          Elasticity (Economics)
          Technological innovations
          Research and Development in Biotechnology
          Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
          Endogenous growth (Economics)
          Research & development
          Creative destruction
      keyword:
        population growth and technological progress
        Schumpeterian growth
        variable demand elasticity
        population growth and technological progress
        Schumpeterian growth
        variable demand elasticity
      ab: Variable Demand Elasticity preferences are introduced into a canonical two‐sector R&D model. The departure from the traditional CES specification yields novel growth dynamics: for a sufficiently high population growth rate, a semi‐endogenous balanced growth path ("BGP") of drastic innovation is characterized, along which economic growth is determined by the population growth rate. However, for a sufficiently low population growth rate, the model economy converges to the limit values of demand elasticity and a fully endogenous growth regime of non‐drastic innovation. A few stylized facts undermine the empirical relevance of the semi‐endogenous BGP with drastic innovation to developed economies.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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