期刊名称：Discussion Papers in Economics / Department of Economics, University of Surrey
出版年度：2014
出版社：University of Surrey
摘要：Despite the evidence on incomplete financial markets and substantial risk being borneby innovators, current models of growth through creative destruction predominantly modelinnovators’ as risk neutral. Risk aversion is expected to reduce the incentive to innovateand we might fear that without insurance innovation completely disappears in the longrun. The present paper introduces risk averse agents into an occupational choice modelof endogenous growth in which insurance against failure to innovate is not available. Wederive a clear negative relationship between the level of risk aversion and long run growth.Surprisingly, we show that in an equilibrium there exists a cut-o↵ value of risk aversionbelow which the growth rate of the mass of innovators tends to a strictly positive constant.In this case, innovation persists on the long run and consumption per capita grows at astrictly positive rate. On the other hand, for levels of risk aversion above the cut-o↵ ofvalue, the economy eventually stagnates
