Growth and trustified capitalism

摘要: Abstract Previous models of quality improvements focus on what Schumpeter called ‘competitive capitalism’. Innovating firms drive their rivals out business. In this paper, a model which captures important aspects Schumpeter's notion ‘trustified capitalism’ is developed. capture market share from but do not them Most the results earlier carry over. For example, determinants growth rate are exactly same as in previous models. However, two differences arise. contrast to models, guaranteed by diminishing returns scale R&D. Also laissez faire unambiguously below socially optimal rate. The lack ambiguity occurs because negative profit destruction externality weakened when innovating only part rivals's share.