Grossman, GeneHelpman, Elhanan2016-02-232014Grossman, Gene, and Elhanan Helpman. 2014. Growth, Trade, and Inequality. Working Paper, Department of Economics, Harvard University.http://nrs.harvard.edu/urn-3:HUL.InstRepos:25586653We 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.en-USendogenous growthinnovationincome distributionincome inequalitytrade and growthResearch Paper or Report2014-09-222016-02-23