In this paper we assess the properties of scale-free endogenous growth models in presence of use costs for the final users. As bench-mark we use Segerstrom (2000) two R&D sector model. When use costs apply to both types of innovation we find counterintuitive results with respect to the standard Endogenous Growth literature ; use costs can increase growth. This is due to the presence of both increasing returns in the research functions and the population growth condition. When costs apply to vertical innovations only we can establish more intuitive results : under mild conditions use costs decrease the rate of vertical innovation and of overall economic growth.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.