@article{273, author = {Gene Grossman and Elhanan Helpman}, title = {Growth, Trade, and Inequality}, abstract = {We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated product and a random technology for producing it. Technologies differ in complexity and productivity, and technological sophistication is complementary to worker ability. We study the co-determination of growth and income inequality in both the closed and open economy, as well as the spillover effects of policy and conditions in one country to outcomes in others.}, year = {2018}, journal = {Econometrica}, volume = {86}, number = {1}, pages = {37{\textendash}83}, issn = {0012-9682}, isbn = {1573-4471}, url = {https://www.econometricsociety.org/doi/10.3982/ECTA14518}, doi = {10.3982/ECTA14518}, language = {eng}, }