Endogenous Growth and Consumption Aggregation
AbstractIn this paper general CES consumption preferences are introduced into an endogenous growth model `a la Bernard, Eaton, Jensen, and Kortum (2003) and Eaton and Kortum (2001). This is in contrast to the more generally used assumption of logarithmic preferences. The paper shows that the CES preference structure does not alter the expected profits from engaging in R&D and therefore the growth path. This is proof that the analytically more convenient logarithmic preferences do not sacrifice generality. It is argued that the driving force behind this result is the common assumption of undirected research.
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Bibliographic InfoPaper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 0712.
Length: 11 pages
Date of creation: May 2012
Date of revision:
CES Preferences; Endogenous Growth; Research;
Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-08 (All new papers)
- NEP-DGE-2012-05-08 (Dynamic General Equilibrium)
- NEP-FDG-2012-05-08 (Financial Development & Growth)
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