In this article, a mechanism supporting the existence of an inverted u-shaped relation between the number of public holidays and the growth of an economy is presented. The nonlinear relationship is originated by two forces within a Schumpeterian economy: On the one hand, as the number of public holidays grows, the total number of workers searching for innovation increases; on the other hand, as the number of days of recreation increases, the number of working days producing innovations decreases. The combination of these two forces generates the inverted u-shaped relationship. The hypothesized mechanism suggests the existence of an optimal number of public holidays for an economy.
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