Found 39 article(s) for author 'Philippe Aghion'

Entrepreneurship and growth: lessons from an intellectual journey

Entrepreneurship and growth: lessons from an intellectual journey. Philippe Aghion, January 2017, Paper, “This lecture is the story of an intellectual journey, that of elaborating a new—Schumpeterian—theory of economic growth. A theory where (i) growth is generated by innovative entrepreneurs; (ii) entrepreneurial investments respond to incentives that are themselves shaped by economic policies and institutions; (iii) new innovations replace old technologies: in other words, growth involves creative destruction and therefore involves a permanent conflict between incumbents and new entrants. First, we motivate and then lay out the Schumpeterian paradigm and point to a set of empirical predictions which distinguish this paradigm from other growth models. Second, we raise four debates on which the Schumpeterian approach sheds new light: the middle income trap, secular stagnation, the recent rise in top income inequality, and firm dynamics. Third and last, we show how the paradigm can be used to think (or rethink) about growth policy design.Link

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Competitiveness and Growth Policy Design

Competitiveness and Growth Policy Design. Philippe Aghion, March 22, 2016, Book Chapter. “After decades during which governments in developed countries would privilege domestic demand as a main driver of economic growth, the advent of globalisation has forced governments to increasingly turn their attention to the competitiveness of the domestic economy, i.e. the extent to which a country can export its production abroad and thereby ‘exchange goods and services in which it is abundant for goods and services that it lacks’.Link

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What is the link between innovation and social mobility?

What is the link between innovation and social mobility? Philippe Aghion, July 30, 2015, Opinion. “Over the past decades, we have seen an accelerated increase in top income inequality worldwide, particularly in developed countries (Goldin and Katz 2008, Deaton 2013, Piketty 2013). In recent research (Aghion et al. 2015), we argue that in developed countries, starting with the US, innovation is an unavoidable part of the story. Thus, if we look at innovation (measured by the annual flow of patents) and top income inequality (measured by the top 1% income share) in the US since the 1960s, we see that these two follow parallel evolutions…Link

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Innovation, Income Inequality, and Social Mobility

Innovation, Income Inequality, and Social Mobility. Philippe Aghion, July 28, 2015. Paper. “In recent decades, there has been an accelerated increase in top income inequality, particularly in developed countries. This column argues that innovation partly accounts for the surge in top income inequality and fosters social mobility. In particular, the positive effect of innovation on social mobility is due to new innovators. Over the past decades, we have seen an accelerated increase in top income inequality worldwide, particularly in developed countries (Goldin and Katz 2008, Deaton 2013, Piketty 2013). In recent research (Aghion et al. 2015)…Link

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Innovation and Top Income Inequality

Innovation and Top Income Inequality. Philippe Aghion, June 2015, Paper. “In this paper we use cross-state panel data to show a positive and significant correlation between various measures of innovativeness and top income inequality in the United States over the past decades. Two distinct instrumentation strategies suggest that this correlation (partly) reflects a causality from innovativeness to top income inequality, and the effect is significant: for example, when measured by the number of patent per capita, innovativeness accounts on average across US states for around 17% of the total increase in the top 1% income share between 1975 and 2010…Link

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Lessons from Schumpeterian Growth Theory

Lessons from Schumpeterian Growth Theory. Philippe Aghion, May 2015, Paper. “By operationalizing the notion of creative destruction, Schumpeterian growth theory generates distinctive predictions on important microeconomic aspects of the growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector reallocation) which can be confronted using rich micro data. In this process the theory helps reconcile growth with industrial organization and development economics.” Link

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Growth and Decentralization in Bad Times

Growth and Decentralization in Bad Times. Philippe Aghion, Raffaella Sadun, April 8, 2015, Paper. “Is decentralization beneficial to firm performance in “bad times”? We present a model where negative demand shocks increase the importance of rapid action, and improve the alignment of incentives of managers within firms. We test this idea exploiting the heterogeneous impact of the 2008-2009 Great Recession across industries and countries using firm-level cross-country panel data combined with our survey data on firm organization. Decentralized firms perform better than their centralized counterparts in terms of sales and TFP growth…” Link

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Creative Destruction and Subjective Wellbeing

Creative Destruction and Subjective Wellbeing. Philippe Aghion, April 2015, Paper. “In this paper we analyze the relationship between turnover-driven growth and subjective wellbeing, using cross-sectional MSA level US data. We find that the effect of creative destruction on wellbeing is (i) unambiguously positive if we control for MSA-level unemployment, less so if we do not; (ii) more positive on future wellbeing than on current well-being; (iii) more positive in MSAs with faster growing industries or with industries that are less prone to outsourcing; (iv) more positive in MSAs within states with more generous unemployment insurance policies…Link

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Knowledge Spillovers, Innovation and Growth

Knowledge Spillovers, Innovation and Growth. Philippe Aghion, March 2015, Paper. “Cohen and Levinthal (1989) introduced the notion of absorptive capacity and demonstrated that knowledge spillovers can induce complementarities in R&D efforts. We show that this idea has rich implications when analysing important aspects of the growth process such as cross-country convergence and divergence, the international co-ordination of climate change policies, and the role of openness in the production of ideas. We also show that the notion of absorptive capacity sets an agenda for new empirical and theoretical analyses of the role of R&D spillovers in innovation and growth…” Link

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Liquidity and growth: the role of counter-cyclical interest rates

Liquidity and growth: the role of counter-cyclical interest rates. Philippe Aghion, Emmanuel Farhi, February 2015, Paper. “In this paper, we use cross-industry, cross-country panel data to test whether industry growth is positively affected by the interaction between the reaction of real short-term interest rates to the business cycle and industry-level measures of financial constraints. Financial constraints are measured, either by the extent to which an industry is prone to being “credit-constrained”, or by the extent to which it is prone to being “liquidity-constrained”. Our main findings are that: (i) the interaction between credit or liquidity...” Link

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