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R&D and Economic Growth Author info | Abstract | Publisher info | Download info | Related research | Statistics Stokey, Nancy L
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The aggregate rate of R&D in a competitive economy is compared with the optimal rate. The optimal rate of R&D is shown to be the same for all preferences in a broad family, while the competitive rate is sensitive to the form of substitutability among products and so can vary dramatically within a family. The second-best level of R&D is shown to be also common within a family and equal to the optimal rate. Numerical examples suggest that diminishing returns in the innovation technology is the most important potential source for excessive R&D in a competitive economy. Copyright 1995 by The Review of Economic Studies Limited.
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Article provided by Blackwell Publishing in its journal Review of Economic Studies .
Volume (Year): 62 (1995)
Issue (Month): 3 (July)
Pages: 469-89
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Handle: RePEc:bla:restud:v:62:y:1995:i:3:p:469-89Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
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