Working Paper: NBER ID: w29173
Authors: Kevin A. Bryan; Heidi L. Williams
Abstract: This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We summarize the state of the literature on the economics of innovation and highlight open policy questions. We first articulate the key market failures in markets for innovation, and then discuss how both scientific norms and market-oriented policies help overcome those market failures. We close by discussing recent work on the diffusion of inventions as well as on the links between innovation and inequality.
Keywords: No keywords provided
JEL Codes: O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market failures (D52) | underproduction of innovation (O39) |
| government policies (H59) | improved innovation outcomes (O36) |
| R&D investments (O32) | innovation rates (O39) |
| underappropriated R&D (O32) | lower levels of innovation (O39) |
| lower levels of innovation (O39) | hampered economic growth (F69) |
| social returns to R&D > private returns (O39) | need for government-supported innovation policies (O38) |