Institutions, Innovation and Growth

Institutions, Innovation and Growth

Selected Economic Papers

The Cournot Centre series

Edited by Jean-Philippe Touffut

The first book in this important new series, under the general editorship of Nobel Laureate Robert Solow, Institutions, Innovation and Growth assembles a stellar cast of international contributors. Leading economists join the debate on innovation and economic growth, focussing on a broad spectrum of issues ranging from labour markets to corporate governance. Growth paths within the OECD are also assessed, with particular emphasis on contrasts between US and European models. The book seeks to identify those institutional factors, taking into account different national trajectories, which might serve to promote economic growth in Europe.


Robert M. Solow

Subjects: economics and finance, economics of innovation, industrial economics, innovation and technology, economics of innovation


Robert M. Solow It is not certain that faster, stabler economic growth is the key to all the other preoccupations of economic policy. But nearly everyone thinks it is; and we can agree that strong economic growth cannot be a disadvantage. Even issues having to do with the inequality of income and wealth, though not automatically solved by economic growth, are thought to be easier to deal with when ‘a rising tide is lifting all the boats’. It is also universally believed, probably rightly, that innovation – both technological and organizational – is the key to faster growth for modern industrial economies. So it is natural that the first two conferences of The Saint-Gobain Centre should have been devoted to the conditions of European growth, and the institutional prerequisites for fast and successful innovation. This volume includes a number of the papers presented at these conferences. I have already, in these two harmless paragraphs, exemplified what seems to me to be a bad habit. Economists and the broader community interested in these questions tend to speak vaguely of ‘faster growth’ when they mean, or ought to mean, something different. The theory of economic growth teaches the importance of distinguishing between the long-term sustainable rate of growth (the ‘steady-state’ growth rate of output or output per person) and the level of the growth path itself. It is much harder and more problematic to achieve a faster long-term growth rate than to raise the level of output all along the long-term growth path. Two...