The Long-Run Growth Effects of R&D Subsidies
AbstractThis paper presents a model of R&D-driven growth without scale effects where firms can engage in both horizontal and vertical R&D activities. Unlike in earlier models of R&D-driven growth without scale effects by Jones (1995), Segerstrom (1998) and Young (1998), R&D subsidies can have long-run growth effects. Indeed, for a wide range of parameter values, a permanent increase in the R&D subsidy rate decreases the long-run rate of economic growth. An intuitive explanation for why R&D subsidies sometimes retard growth and sometimes promote growth is provided.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 506.
Length: 36 pages
Date of creation: 05 Nov 1998
Date of revision:
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Economic growth; R&D;
Other versions of this item:
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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