from catchup to frontierinnovation growth：从赶上前沿创新成长.pptVIP

Reducing corruption or increasing trust enhances growth From Catch-Up to Frontier-Innovation Growth Philippe Aghion Questions How can China avoid the middle income trap and succeed in transition from “catch-up economy” to “frontier innovator”? Does this also require institutional change, not just policy change? Rethinking the role and size of the state? Schumpeterian Paradigm Long-run growth is driven by (frontier) innovations Innovations result from entrepreneurial investments (RD…) which are themselves motivated by the prospect of innovation rents Policy of growth Creative destruction: new innovations make old technologies become obsolete Political economy of growth Schumpeterian Paradigm A first prediction of the paradigm is that (frontier) innovation requires turnover, i.e reallocation and exit! A second prediction is that competition enhances frontier innovation and thereby growth A third prediction is that growth-enhancing policies depend upon stage of development Frontier innovation vs catch up growth Catch up growth in China Partial market reforms and yardstick competition between provincial leaders Reallocation from agriculture to industry and from SOEs to (credit-constrained) new TVEs and private enterprises (Song-Storesletten-Zilibotti) Technological catch-up taking advantage of FDI From catch-up growth to innovation-based growth in China More reallocation-based growth can be achieved from liberalizing labor flows from rural to urban areas and from developing financial sector From catch-up growth to innovation-based growth in China Yet, several reasons for expecting a slowdown: Gains from reallocating resources from agriculture to industry and from absorption of imported technologies have exhausting effects Wage increases will reduce comparative advantage of China in what it currently exports Pillars of an innovation-based economy First pillar: Competition Competition/entry is more growth-enhancing for countries or sectors that are closer to te