?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F22224%2F&rft.title=Using+the+Salop+Circle+to+Study+Scale+Effects+in+Schumpeterian+Growth+Models%3A+Why+Inter-sectoral+Knowledge+Diffusion+Matters&rft.creator=Gray%2C+Elie&rft.creator=Grimaud%2C+Andr%C3%A9&rft.subject=B-+ECONOMIE+ET+FINANCE&rft.description=This+paper+analyzes+the+link+between+the+fact+that+fully+endogenous+growth+models+exhibit+(or+not)+the+non-desirable+scale+effects+property+and+assumptions+regarding+the+intensity+of+knowledge+diffusion.+In+that+respect%2C+we+extend+a+standard+Schumpeterian+growth+model+by+introducing+explicitly+knowledge+diffusion+over+a+Salop+(1979)+circle%3A+a+continuum+of+sectors+simultaneously+sending+and+receiving+knowledge+is+located+over+the+circle.+The+link+between+knowledge+diffusion+and+scale+effects+stems+from+the+fact+that+the+more+diffusion+spreads+with+the+size+of+the+economy%2C+the+larger+the+pools+of+knowledge+used+by+each+sector%E2%80%99s+R%26D+activity+are%2C+the+higher+the+marginal+productivity+of+labor+in+R%26D+is%2C+and+eventually+the+higher+the+growth+rate+is.+The+paper+tackles+the+apparent+following+paradox.+Knowledge+diffusion+seems+to+lead+to+scale+effects%3B+however%2C+the+former+is+empirically+desirable+while+the+latter+is+not.+Our+first+basic+result+is+that+a+sufficient+condition+to+have+a+scale-invariant+fully+endogenous+growth+model+is+to+assume+no+inter-sectoral+knowledge+diffusion.+However%2C+this+assumption+is+not+empirically+reasonable.+We+overcome+the+aforementioned+paradox+by+showing+that+the+absence+of+diffusion+is+not+a+necessary+condition+to+suppress+scale+effects.+More+precisely%2C+we+determine+sets+of+reasonable+assumptions+on+knowledge+diffusion+under+which+one+can+obtain+fully+endogenous+growth+models+complying+with+most+undeniable+empirical+facts+-+namely+the+absence+of+significant+scale+effects%2C+the+impact+of+public+policies+on+the+growth+rate%2C+and+somehow+realistic+interactions+among+sectors+R%26D+activities+(including+the+occurrence+of+GPTs).&rft.publisher=TSE+Working+Paper&rft.date=2016-07&rft.type=Monograph&rft.type=NonPeerReviewed&rft.format=text&rft.language=fr&rft.identifier=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F22224%2F1%2Fgray_22224.pdf&rft.identifier=++Gray%2C+Elie+%3Chttps%3A%2F%2Fwww.idref.fr%2F069803595%3E+and+Grimaud%2C+Andr%C3%A9+%3Chttps%3A%2F%2Fwww.idref.fr%2F070371601%3E++(2016)+Using+the+Salop+Circle+to+Study+Scale+Effects+in+Schumpeterian+Growth+Models%3A+Why+Inter-sectoral+Knowledge+Diffusion+Matters.++TSE+Working+Paper%2C+n.+16-676%2C+Toulouse+++++&rft.relation=http%3A%2F%2Ftse-fr.eu%2Fpub%2F30558&rft.language=en