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In this paper, the authors integrate Schumpeterian endogenous growth into a general equilibrium framework. By explicitly modeling the innovation and technology adoption process they are able to match some stylized economic facts such as entry rates and survival times of firms in the U.S. economy or the maximum convergence rates across countries. Additionally, it allows them to propose a new definition of what a technology shock is and to compare it with the standard definition. Results show how this framework provides a plausible description of how economies grow and respond to the arrival of new technologies.
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