Abstract for: Innovation Gains

This paper investigates how positive feedback loops driven by knowledge accumulation and institutional factors influence innovation rates at the national level. The paper uses the notion of gain to capture the strength of these feedback loops. Through theoretical modeling and empirical analysis, including case studies from three Latin American countries, the paper explores the dynamics of knowledge creation and its cumulative effect on innovation. The findings highlight the importance of positive reinforcement, where increased knowledge leads to further knowledge creation. This research contributes to an understanding of how feedback mechanisms shape the innovative capacity of nations, offering insights for policymakers on leveraging these dynamics to amplify innovation outcomes.