POL371H1 Lecture Notes - Leontief Paradox, Linear Model, Factors Of Production
Document Summary
Innovations: are new combinations (of production factors) that compete successfully against old combinations (schumpeter 1911) He/she is not necessarily the owner of a firm, but: the person who introduces new combinations to the market. Followers also receive a rent, yet: it declines over time. Innovation: an invention is a new technology and even an improvement of eth existing product. Innovation is introducing teh product in eth market, bt inventors are actually who picks products up and creates something new. Innovation s are a combination of production factors. Is ppl introduce products in teh market and do well, then they can introduce it in a high price and exploit a lot of rent of tehis. Combination- old and new combinations of old and new products. Traditional view: innovations result from a discrete sequence of stages. In this model, new products enter markets in their final form. Generates new scientific knowledge, not necessarily directed towards product/process innovation.
