For example, general resources must now be divided between the production of "goods" physical capital or consumption of goods in a field-either and other knowledge production. This is the role of a coefficient in R & D of the Romer model (or knowledge production). Because businesses learn from experience how to produce more efficient, with a higher rate of economic activity can increase the speed of innovation process by giving enterprises produce more experience. In addition, since many innovations are the result of R & D spending is done by companies looking to profit, economic policies with respect to trade, competition, education, tax and intellectual property that can affect the speed of innovation due to the influence the costs and benefits of doing R & D in private.
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