An investigation concerning some recent developments in growth theory
In chapter I, we model monopolistic competition in the spirit of Blanchard and Kiyotaki (1987) and we study the implications of this market structure for the existence of dynamically inefficient equilibria. We show that, with free entry, the presence of some pure profit does not rule out dynamic inefficiency, while the assumption of blockaded entry makes dynamic inefficiency impossible, since every firm grows at the aggregate growth rate and all future profits are capitalised in advance. Chapter II is devoted to the analysis of some recent developments of the theory of long-run endogenous growth. We build a model where technology is non rival but partially specific to each firm, and monopolistic competition is modelled assuming that output is produced by means of a fixed measure of intermediate goods. The main result obtained in this chapter is that the growth rate, with infinite lives, is independent from the degree of monopolistic power; with finite lives this relation becomes more complex. The purpose of chapter III is to show that a negative relationship between capital accumulation and money growth is not incompatible with the common practice of inserting money into the utility function in the fashion of Sidrauski (1967). Adopting an instantaneous utility function allowing for a non-unit elasticity of substitution between real money balances and consumption, we find that the occurrence of the Tobin effect depends on the values of the parameters. In chapter IV we consider the effect of technological uncertainty on welfare in an endogenous growth model based on positive spillovers.