Competition, Innovation and Growth with Limited Commitment
---- Acknowledgements -----
We would like to thank Francesco Caselli, Hugo Hopenhayn, Boyan Jovanovic, Narayana Kocherlachota, Omar Licandro, Michele Boldrin, Stephen Parente and seminar participants at CEMFI, CEPR Macroeconomic Symposium in Cyprus, London School of Economics, ITAM, Monetary Conference at Banco of Portugal, NBER Summer Institute, SED meeting in Budapest, Universitat Pompeu Fabra, University of Porto, University of Southern California, University of Toronto and World Congress in London. Marimon acknowledges support from Ente Luigi Einaudi, Fundacion BBVA and Ministerio de Educacion y Ciencia. Quadrini acknowledges support from the National Science Foundation.