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Research Policy and U.S. Economic Growth

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  • Richard M. H. Suen

    (University of Connecticut)

Abstract

This paper examines quantitatively the effects of R&D subsidy and government-financed basic research on U.S. economic growth and consumer welfare. To achieve this, we develop an endogenous growth model which takes into account both public and private research investment, and the differences between basic and non-basic research. A calibrated version of the model is able to replicate some important features of the U.S. economy over the period 1953-2009. Our model suggests that government spending on basic research is an effective policy instrument to promote economic growth. Subsidizing private R&D, on the other hand, has no effect on economic growth.

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Bibliographic Info

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2013-18.

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Length: 87 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:uct:uconnp:2013-18

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Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/
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Keywords: Research Policy; Basic and Applied Research; R&D Spending; Endogenous Growth;

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