http://repub.eur.nl/res/aut/8136/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/12986/ 2007-09-01T00:00:00Z We analyze the costs of trade restrictions for a small developing economy (LDC). Intermediate goods invented elsewhere are only introduced on the LDC market if it is profitable to do so. The LDC economy evolves to a balanced growth path in which income, welfare, and the share of available goods increase if trade restrictions fall. The adjustment path is asymmetric: an increase in trade restrictions leads to a slow-down of economic growth, while a decrease may lead to a rapid catch-up process. The dynamic costs of trade restrictions are in general substantially larger than the static costs. http://repub.eur.nl/res/pub/8145/ 2006-11-30T00:00:00Z It is one of the most popular and debated topics in economic science: economic growth. Where do high or low growth rates come from and how do the mechanisms that underlie economic growth work? Who gains and who loses? Uncertainty has a negative impact on economic growth, directly through negatively affecting the effectiveness of R&D, and indirectly through reducing the level of openness of a country. The process of R&D can continue indefinitely if an economy is able to constantly reduce its coss by having access to a pool of general knowledge that is sufficiently large. Dynamic welfare effects oflowering trade restrictions are much more important and much larger for an economy if it involves changing the share of new innovations and goods that are introduced. The more open a small developing economy is, the larger the dynamic welfare gains are. Obsolescence can be introduced successfully in a horizontal endogenous growth model via incorporating maintenance costs. When teh size of the maintenance cost sector increases at the expense of the production and R&D sectors, growth rates drop. http://repub.eur.nl/res/pub/6865/ 2001-06-19T00:00:00Z We analyze the impact of obsolescence of economic inventions by incorporating maintenance costs in the endogenous growth model of expanding product varieties. This contrasts with the existing literature, which ignores maintenance costs and uses the model of quality improvements to describe obsolescence. If the maintenance costs become too high, the operating profits become negative and the firm stops producing the variety. This diminishes the life span of innovations, thus reducing the return on investment in research and development and the growth rate of the economy.