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dc.contributor.authorChiu, Jonathanen_US
dc.contributor.authorMeh, Césaireen_US
dc.contributor.authorWright, Randallen_US
dc.date.accessioned2011-11-07en_US
dc.date.accessioned2011-12-15T12:57:13Z-
dc.date.available2011-12-15T12:57:13Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/53874-
dc.description.abstractThe generation and implementation of ideas, or knowledge, is crucial for economic performance. We study this process in a model of endogenous growth with frictions. Productivity increases with knowledge, which advances via innovation, and with the exchange of ideas from those who generate them to those best able to implement them (technology transfer). But frictions in this market, including search, bargaining, and commitment problems, impede exchange and thus slow growth. We characterize optimal policies to subsidize research and trade in ideas, given both knowledge and search externalities. We discuss the roles of liquidity and financial institutions, and show two ways in which intermediation can enhance efficiency and innovation. First, intermediation allows us to finance more transactions with fewer assets. Second, it ameliorates certain bargaining problems, by allowing entrepreneurs to undo otherwise sunk investments in liquidity. We also discuss some evidence, suggesting that technology transfer is a significant source of innovation and showing how it is affected by credit considerations.en_US
dc.language.isoengen_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Working Paper 2011,25en_US
dc.subject.jelE4en_US
dc.subject.jelG2en_US
dc.subject.jelO3en_US
dc.subject.jelO4en_US
dc.subject.ddc330en_US
dc.subject.keywordEconomic modelsen_US
dc.subject.keywordPotential outputen_US
dc.subject.keywordProductivityen_US
dc.titleInnovation and growth with financial, and other, frictionsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn671590790en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Bank of Canada Working Papers

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