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R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth

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Author Info

  • Miroslav Verbič

    ()
    (Faculty of Economics, University of Ljubljana, Slovenia and Institute for Economic Research, Ljubljana, Slovenia)

  • Boris Majcen

    ()
    (Institute for Economic Research, Ljubljana, Slovenia)

  • Olga Ivanova

    ()
    (TNO Bouw en Ondergrond, Delft, Netherlands)

  • Mitja Čok

    ()
    (Faculty of Economics, University of Ljubljana, Slovenia)

Abstract

In the article, we model R&D as a major endogenous growth element in a small open economy general equilibrium framework and consider several R&D policy scenarios for Slovenia. Increase of the share of sectoral investment in R&D that is deductible from the corporate income tax and increase of government spending on R&D turned out to be the most effective suggested policy measures. While the former policy measure is still followed in part by an undesired transfer of the tax relief to dividends, a moderate increase of government spending on R&D boosts long-run productivity in the economy, thus increasing the future value of firms, which is reflected in a desired dividend increase. The households that would gain more utility from such policy scenarios are those with more skilled and highly skilled labour, but not the very top earners in the economy.

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Bibliographic Info

Article provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.

Volume (Year): 58 (2011)
Issue (Month): 1 (March)
Pages: 67-89

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Handle: RePEc:voj:journl:v:58:y:2011:i:1:p:67-89

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Web page: http://www.panoeconomicus.rs/

Related research

Keywords: Endogenous growth; General equilibrium modelling; R&D; Slovenia;

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Citations

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Cited by:
  1. Reiljan, Janno & Paltser, Ingra, 2013. "The implementation of research and development policy in European and Asian countries," Discourses in Social Market Economy 2013-03, OrdnungsPolitisches Portal (OPO).
  2. Pop-Silaghi, Monica & Jude, Cristina & Alexa, Diana & Litan, Cristian, 2012. "Do business and public sector research and development expenditures contribute to economic growth in central and eastern European countries? A dynamic panel estimation," Economics Discussion Papers 2012-4, School of Economics, Kingston University London.

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