Abstract
We review some of the literature at the intersection of innovation, financial markets, and economic growth. We explore two key questions: (i) How financial markets interact with innovation; (ii) what type of quality transformations are brought about by innovation. A special emphasis is given to questions that stem from the 2008 economic and financial crisis, and to subjects further developed in the articles collected in this issue.
Similar content being viewed by others
Notes
1 This issue draws its inspiration from the 8th European Meeting on Applied Evolutionary Economics, held in Sophia Antipolis on June 10–12, 2013, on the premises of SKEMA Business School.
References
Acemoglu D, Ozdaglar A, Tahbaz-Salehi A (2015) Systemic risk and stability in Financial Networks. Am Econ Rev 105:564–608
Acemoglu D, Carvalho V, Ozdaglar A, Tahbaz-Salehi A (2012) The network origins of aggregate fluctuations. Econometrica 80:1977–2016
Aghion P, Howitt P (1992) A model of growth through creative destruction. Econometrica, Econometric Society 60(2):323–51
Aghion P, Bolton P (1997) A theory of Trickle-Down growth and development. Rev Econ Stud 64:151–72
Albert R, Jeong H, Barabasi A-L (2000) Error and attack tolerance of complex networks. Nature 406:378–381
Allen F, Gale D (2000) Financial contagion. J Polit Econ, University of Chicago Press 108(1):1–33
Allen F, Gale D (2004) Competition and financial stability. J Money Credit Bank 36(3)
Arnold LG (1998) Growth, welfare, and trade in an integrated model of human-capital accumulation and research. J Macroecon 20(1):81–105
Arrow KJ (1962) The economic implications of learning by doing. Rev Econ Stud 29(3):155–173
Arthur B (1989) Competing technologies, increasing returns, and lock-in by historical events. Econ J 99:116–131
Atkinson A, Morelli S (2010) Inequality and banking crises: a first look. Paper prepared for the European Labour Forum in Turin organised by the International Training centre of the International Labour Organization (ILO)
Atkinson A, Morelli S (2011) Economic crises and Inequality, Human Development Research Papers (2009 to present) HDRP-2011-06 Human Development Report Office (HDRO), United Nations Development Programme (UNDP)
Babutsidze Z (2016) Innovation, competition and firm size distribution on fragmented markets. J Evol Econ. doi:10.1007/s00191-015-0425-5
Battiston S, Gatti DD, Gallegati M, Greenwald BCN, Stiglitz JE (2012) Liaisons dangereuses: Increasing connectivity, risk sharing, and systemic risk. J Econ Dyn Control 36(8):1121–1141
Baumol WJ (2002) The free-market innovation machine: analyzing the growth miracle of capitalism. Princeton University Press, Princeton
Bhattacharya U (1997) Communication costs, information acquisition and voting decision in proxy contests. Rev Financ Stud 10:1065–97
Benabou R (1996) Inequality and growth. NBER Macroeconomics Annual. National Bureau of Economic Research, Inc.
Beck T, Demirgüç-Kunt A, Levine R (2007) Finance, inequality and poverty: cross-country evidence
Bertola G, Foellmi R, Zweimüller J (2006) Income distribution in macroeconomic models. Princeton University Press
Bordo MD, Meissner CM (2012) Does inequality lead to a financial crisis? J Int Money Financ 31(8):2147–2161
Breschi S, Malerba F, Orsenigo L (2000) Technological regimes and Schumpeterian patterns of innovation. Econ J 110:338–410
Campbell TL, Keys PY (2002) Corporate Governance in South Korea: the chaebol experience. Journal of Corporate Finance 8:373–391
Choi J-P, Cowing TG (1999) Firm behavior and group affiliation: the strategic role of corporate grouping for korean firms. Journal of Asian Economics 10:195–209
Chu A, Cozzi G, Galli S (2012) Does intellectual monopoly stimulate or stifle innovation? Eur Econ Rev 56:727–746
Claessens S, Perotti E (2007) Finance and inequality: channels and evidence. J Comp Econ 35:748–773
Cohen W, Levinthal D (1989) Innovation and learning: the two faces of R&D. Econ J 99:569–596
Cowan R, David P, Foray D (2000) The explicit economics of knowledge codification and tacitness. Ind Corp Chang 9:211–253
Dasgupta P, Stiglitz J (1980) Uncertainty, Industrial Structure, and the Speed of RandD. Bell J Econ, The RAND Corporation 11(1):1–28
Diamond PA (1982) Aggregate demand management in search equilibrium. J Polit Econ, University of Chicago Press 90(5):881–94
Diamond, Rajan (2001) Liquidity risk, liquidity creation and financial fragility: a theory of banking. J Polit Econ 109(2):287–327
Dosi G (1997) Opportunities, incentives and the collective patterns of technological change. Econ J 107:1530–1547
Durlauf SN (1993) Time series properties of aggregate output fluctuations. J Econ, Elsevier 56(1-2):39–56
Duffie D, Garleanu N, Pedersen LH (2005) Over-the-counter markets. Econometrica, Econometric Society 73(6):1815–1847
Dutt AK (2006) Maturity, stagnation and consumer debt: a Steindlian approach. Metroeconomica 57:339–364
ECB (2010) Recent advances in modelling systemic risk using network models. European Central Bank. Available at: https://www.ecb.europa.eu/pub/pdf/other/modellingsystemicrisk012010en.pdf
Eckbo BE (2009) Bidding strategies and takeover premiums: a review
Equilar (2007) Executive Compensation Trends—June: CEO Exit Packages, Fortune 200 CEO Severance & Change-in-Control Packages
Fulghieri P, Suominen M (2012) Corporate governance, finance, and the real sector. J Financ Quant Anal 47:1187–1214
Funke M, Strulik H (2000) On endogenous growth with physical capital, human capital and product variety. Eur Econ Rev, Elsevier 44(3):491–515
Gaffeo E, Massimo M (2016) Macroprudential consolidation policy in interbank networks. J Evol Econ. doi:10.1007/s00191-015-0419-3
Gai P, Haldane A, Kapadia S (2011) Complexity, concentration and contagion? J Monet Econ 58(5):453–470
Galbraith JK (2012) Inequality and instability: a study of the world economy just before the great crisis. Oxford University Press, New York
Galli E-P, Legros D (2012) ‘Firms’ human capital, R&D and innovation: a study on French firms’. Empir Econ 43:581–586
Galor O, Zeira J (1993) Income distribution and macroeconomics. Rev Econ Stud 60:35–52
Goergen M, Renneboog L (2004) Shareholder wealth effects of european domestic and cross-border takeover bids. European Financial Management
Gray E, Grimaud A (2016) The Lindahl equilibrium in Schumpeterian growth models. J Evol Econ. doi:10.1007/s00191-015-0417-5
Greenwood J, Jovanovic B (1990) Financial development, growth, and the distribution of income. J Polit Econ 98(5):1076–1107
Grossman SJ, Hart OD (1980) Takeover bids, the free-rider problem, and the theory of the corporation. Bell J Econ 11(1):42–64
Grossman G, Helpman H (1991) Innovation and growth in the global economy. The MIT Press
Haldane AG (2011) The race to zero. Presentation at the International Economic Association Sixteenth World Congress
Herrendorf B, Rogerson R, Valentinyi A Aghion P, Durlauf S (eds) (2015) Growth and structural transformation, vol 2a. Elsevier, Amsterdam
Holmstrom B, Tirole J (1996) Modeling aggregate liquidity, vol 86
Hoppe F (1984) Polya-like urns and the Ewen’s sampling formula. J Math Biol 20:91–94
Hyytinen A, Kuosa I, Takalo T (2002) Law of Finance: Evidence from Finland, Research Discussion Papers 8/2002, Bank of Finland
Iacopetta M (2010) Phases of economic development and the transitional dynamics of an innovation-education growth model. Eur Econ Rev, Elsevier 54(2):317–330
Iacopetta M (2011) Formal education and public knowledge. J Econ Dyn Control, Elsevier 35(5):676–693
Iacopetta M, Minetti R, Peretto P (2014) Financial Markets, Industry Dynamics, and Growth, ERID Working Paper Series, n. 172, Duke University
Jacob Leal S, Napoletano M, Roventini A, Fagiolo G (2016) Rock around the Clock: an agent-based model of low- and high-frequency trading. J Evol Econ. doi:10.1007/s00191-015-0418-4
Jovanovic B (1987) Micro shocks and aggregate risk. Q J Econ, Oxford University Press 102(2):395–409
Katona G (1964) The mass consumption society. Mc-Graw-Hill Book Company
Katz LF, Autor DH (1999) Changes in the wage structure and earnings inequality. In: Ashenfelter O, Card D (eds) Handbook of Labor Economics. The Netherlands Elsevier, San Diego, USA; Amsterdam, pp 1463–1555
Khanna T (2000) Business groups and social welfare in emerging markets: existing evidence and unanswered questions. Eur Econ Rev 44:748–761
Kiyotaki N, Moore JJ (1997) Credit cycles. J Polit Econ 105(2):211–248
Kiyotaki N, Wright R (1989) On money as a medium of exchange. J Polit Econ 97:927–954
Kosempel S (2004) A theory of development and long run growth. J Dev Econ, Elsevier 75(1):201–220
Krueger D, Perri F (2006) Does income inequality lead to consumption inequality? Evidence and theory. Rev Econ Stud 73(1):163–193
Kumhof M, Ranciere R (2010) Inequality, leverage and crises. IMF Working Papers (268), International Monetary Fund
Kumhof M, Lebarz C, Ranciere R, Richter AW, Throckmorton NA (2012) Income inequality and current account imbalances. IMF. Working Papers (12/08), International Monetary Fund
Kumhof M, Rancière Romain, Winant Pablo (2015) Inequality, leverage, and crises. Am Econ Rev, American Economic Association 105(3):1217–45
Lloyd-Ellis H, Roberts J (2002) Twin engines of growth: Skills and technology as equal partners in balanced growth. J Econ Growth, Springer 7(2):87–115
Lorentz A, Ciarli T, Savona M, Valente M (2016) The effect of demand-driven structural transformations on growth and technological change. J Evol Econ. doi:10.1007/s00191-015-0409-5
Lucchino P, Morelli S (2012) Inequality, debt and growth. Report for the Resolution Foundation
Lucas RE (1977) Understanding business cycles. Carn-Roch Conf Ser Public Policy, Elsevier 5(1):7–29
Lucas R Jr. (1988) On the mechanics of economic development. J Monet Econ 22(1):3–42
Malerba F (2002) Sectoral systems of innovation and production. Res Policy 31:247–264
Malerba F, Orsenigo L (2000) Knowledge, innovative activities and industry evolution. Ind Corp Chang 9:289–314
Manne HG (1965) Mergers and the market for corporate control. J Polit Econ
Marengo L, Zeppini P (2016) The arrival of the new. J Evol Econ. doi:10.1007/s00191-015-0438-0
Matsuyama K (2002) The rise of mass consumption societies. J Polit Econ, University of Chicago Press 110(5):1035–1070
Milgrom P, Roberts J (1990) The economics of modern manufacturing. Am Econ Rev 80(3):511–528
Mokyr Joel (2010) The enlightened economy: an economic history of britain 1700–1850. Yale University Press, New Haven
Morck R, Wolfenzon D, Yeung B (2005) Corporate governance, economic entrenchment, and growth. J Econ Lit 43:655–720
Nelson R (1959) The simple economics of basic research. J Polit Econ 67:297–306
Nelson RR, Phelps ES (1966) Investment in humans, technological diffusion, and economic growth. Am Econ Rev 56:69–75
O’Donoghue T, Zweimļler J (2004) Patents in a model of endogenous growth. J Econ Growth, Springer 9(1):81–123,03
Palley TI (1994) Debt, aggregate demand, and the business cycle: an analysis in the spirit of Kaldor and Minsky. Journal of Post Keynesian Economics 16:371–390
Pavitt K (1987) The objectives of technology policy. Sci Public Policy 14:182–188
Peretto FP (2015) From Smith to Schumpeter: a theory of take-off and convergence to sustained growth. Eur Econ Rev 78:1–26
Prowse S (1995) Corporate governance in an international perspective: a survey of corporate control mechanisms among large firms in the U.S., U.K, Japan and Germany, financial markets, institutions and instruments 4:1–63
Rajan RG (2010) Fault lines: how hidden fractures still threaten the world economy. Princeton University Press
Rebelo S (1991) Long-run policy analysis and long-run growth. J Polit Econ, University of Chicago Press 99(3):500–521
Reich R (2010) Aftershock: the next economy and America’s future. Knopf, New York
Riccetti L, Russo A, Gallegati M (2014) An agent-based decentralized matching macroeconomic model
Romer PM (1990) Endogenous technological change. J Polit Econ, University of Chicago Press 98(5):S71–102
Russo A, Riccetti L, Gallegati M (2016) Increasing inequality, consumer credit and financial fragility in an agent based macroeconomic model. J Evol Econ. doi:10.1007/s00191-015-0410-z
Russo A, Riccetti L, Gallegati M (2014) Growing inequality, financial fragility, and macroeconomic dynamics: an agent based model. Advances in Social Simulation, Advances in Intelligent Systems and Computing 229:167–176
Sanditov B, Saurabh A (2016) Social network and private provision of public goods. J Evol Econ. doi:10.1007/s00191-015-0436-2
Schumpeter J (1912) The theory of economic development: an inquiry into profits, capital, credit, interest and the business cycle. Harvard University Press, Cambridge
Schneider M, Tornell A (2000) Balance sheet effects, bailout guarantees and financial crises, NBER Working Papers 8060, National Bureau of Economic Research, Inc.
Stiglitz JE (2010) Risk and global economic architecture: why full financial integration may be undesirable? Am Econ Rev 100(2):388–392
Stiglitz JE (2012) The price of inequality: how today’s divided society endangers our future. Norton & Company, Princeton NJ
Stockhammer E (2012) Global finance and social europe. Review of Political Economy, Taylor and Francis Journals 24(4):674–676
Uzawa H (1965) Optimum technical change in an aggregative model of economic growth. Int Econ Rev 6(1):18–31
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interests
The authors declare that they have no conflict of interest.
Rights and permissions
About this article
Cite this article
Babutsidze, Z., Iacopetta, M. Innovation, growth and financial markets. J Evol Econ 26, 1–24 (2016). https://doi.org/10.1007/s00191-016-0448-6
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00191-016-0448-6