{ "item_title" : "Investment, R&d, and Long-Run Growth", "item_author" : [" Dietmar Hornung "], "item_description" : "In the 1990s, growth theory has incorporated imperfect competition in its investigations. This innovation has proven to be seminal: Cleviating from growth models with perfect competition, the new framework featured forward- looking entrepreneurs. Firms maximize profits intertemporarily, i. e. their in- vestment leads to instantaneous sunk costs and offers flows of future profits. Firms finance this investment by launching shares. The capital market is per- fectly competitive, implying that the return on a share is equal to the return on a bond. As opposed to the capital market, the goods market is imperfectly competitive. As a result of investment, firms enjoy market power. That is, firms may acquire the capability to provide a product that is differentiated in, e. g., styling, technology, accessibility, or reputation. The launch of a dif- ferentiated product allows to capture a market niche, and successful firms may price above marginal cost. The resulting profit flows are channelled to the firms' shareholders. The introduction of monopolistic competition into growth theory is valuable: real world economies may be portrayed rather by such an imperfect competition framework than by a perfect competition approach. Starting with Romer (1990), in growth theory, modeling of imperfect competition has been notoriously bound to a focus on the impact of research and development (R&D) on economic growth. In the existing literature, growth-affecting investment is restricted to R&D investment.", "item_img_path" : "https://covers2.booksamillion.com/covers/bam/3/54/042/528/3540425284_b.jpg", "price_data" : { "retail_price" : "54.99", "online_price" : "54.99", "our_price" : "54.99", "club_price" : "54.99", "savings_pct" : "0", "savings_amt" : "0.00", "club_savings_pct" : "0", "club_savings_amt" : "0.00", "discount_pct" : "10", "store_price" : "" } }

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