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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jet.2010.02.004 Byline: Yann Bramoulle (a), Gilles Saint-Paul (b)(c)(d) Keywords: Research dynamics; Innovation cycles; Scientific fads Abstract: This paper studies the dynamics of fundamental research. We develop a simple model where researchers allocate their effort between improving existing fields and inventing new ones. A key assumption is that scientists derive utility from recognition from other scientists. We show that the economy can be either in a regime where new fields are constantly invented, and then converges to a steady state, or in a cyclical regime where periods of innovation alternate with periods of exploitation. Our analysis provides a rigorous foundation to the Kuhnian theory of scientific evolution. We show that scientists' care for reputation has a strong impact on research dynamics and tends to favor innovation. Especially, innovation fads may emerge. We also study welfare and find that the academic reputational reward system can help align scientists' short-term incentives with society's long-term interests. Author Affiliation: (a) Department of Economics, GREEN and CIRPEE, Universite Laval, Quebec, Canada (b) IDEI, GREMAQ, LERNA, Toulouse School of Economics, France (c) CEPR, UK (d) IZA, Germany Article History: Received 24 February 2009; Revised 5 November 2009; Accepted 26 January 2010

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jet.2005.09.010 Byline: Gilles Saint-Paul (a)(b) Abstract: Many workers produce intangible, knowledge-intensive inputs, rather than participating directly in the production process. We develop a model where the labor market organizes itself in a knowledge hierarchy. Skills are segmented into successive clusters. Each cluster buys knowledge from the next one and sells knowledge as a production input to the preceding one. The model is useful to study the impact of improvements in the technology of knowledge transmission on inequality. It is shown that inequality goes up at the top of the income distribution, but not at the bottom. Author Affiliation: (a) Universite des Sciences Sociales, Toulouse, France (b) CEPR, CES and IZA, France Article History: Received 16 April 2004; Revised 8 September 2005 Article Note: (footnote) [star] This paper has benefited from suggestions by Michael Piore, Daron Acemoglu, Alessandro Lizzeri, four anonymous referees, as well as comments from seminar participants at Universitat Pompeu Fabra, Barcelona, Humboldt University, Berlin, and the NBER Summer Institute workshop on macroeconomic perspectives. It has been circulated as a working paper under the title 'Information technology and the knowledge elite'.

A general equilibrium framework showed that the structure of the labor market determines the political support for anti-unemployment policies. Political support for active labor market policy is more likely when there is greater elasticity of demand and there are higher benefits to the long-term unemployed. Support also increases when the employed have limited unemployment experience and when the unskilled labor demand is inelastic.

A mathematical model has been constructed to demonstrate the interaction between the collection of the factors of production of physical and human capital and real wage rigidity. The model assumes that skilled and unskilled workers are perfect substitutes, and the arbitrage criterion between employing a skilled and unskilled worker is reflected as a positive association between their relative unemployment rates.