Knowledge triggers regional growth. Evidence suggests that skilled labour force concentrates in islands of innovation … increasing returns to knowledge, favouring the emergence of islands of innovation; regions with a high endowment of cognitive …

We study innovation and the resulting Schumpeterian economic growth that this innovation gives rise to in a model with … balanced growth path (BGP) allocations and the equilibrium of interest. Second, we stipulate the form of the innovation … circumstances in which there is either too much or too little innovation in (i) the ith region, (ii) the aggregate economy of N>2 …