Legal Institutions, Innovation And Growth

The authors build a stylized model of endogenous technological change and analyze the relationship between legal institutions, innovation and growth. Two legal systems are analyzed: a rigid system, where an uncontingent law is written ex ante and a flexible system where law-makers select the law ex post. They show that flexible legal systems dominate in terms of welfare, amount of innovation and output growth in economies at intermediate stages of technological development - which are periods when legal change is more needed - while rigid legal systems are preferable at early stages of technological development, when commitment problems are more severe.

Provided by: University of Salerno Topic: Big Data Date Added: Jul 2010 Format: PDF

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