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R&D Policies and Endogenous Growth: A Dynamic General Equilibrium Analysis of the Case for Canada

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  • Madanmohan Ghosh

Abstract

This paper utilizes a general equilibrium R&D model of endogenous growth via increasing capital variety to examine the impact of alternative policies on productivity and economic growth. The model is calibrated using data from the Canadian economy. Findings reveal that direct incentives such as subsidies to R&D activities would have the highest productivity impact on the Canadian economy, that an increase in subsidies to the users of R&D capital (output) would have a positive but smaller impact, and trade liberalization would have minimal effects on productivity growth via its impact on international R&D spillovers.

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  • Madanmohan Ghosh, 2007. "R&D Policies and Endogenous Growth: A Dynamic General Equilibrium Analysis of the Case for Canada," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 187-203, February.
    • Handle: RePEc:bla:rdevec:v:11:y:2007:i:1:p:187-203
    DOI: 10.1111/j.1467-9361.2007.00381.x
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    1. Henrik Braconier & Fredrik Sjöholm, 1998. "National and international spillovers from R&D: Comparing a neoclassical and an endogenous growth approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(4), pages 638-663, December.
    2. James D. Adams, 1997. "Technology, Trade, and Wages," NBER Working Papers 5940, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Francesco Di Comite & dArtis Kancs, 2015. "Macro-Economic Models for R&D and Innovation Policies," JRC Working Papers on Corporate R&D and Innovation 2015-03, Joint Research Centre.
    2. Chanyoung Hong & Jung In Yeon & Jeong-Dong Lee, 2014. "The Effect of R&D Subsidy for Small and Medium Enterprises," EcoMod2014 6846, EcoMod.
    3. Betarelli Junior, Admir Antonio & Faria, Weslem Rodrigues & Gonçalves Montenegro, Rosa Livia & Bahia, Domitila Santos & Gonçalves, Eduardo, 2020. "Research and development, productive structure and economic effects: Assessing the role of public financing in Brazil," Economic Modelling, Elsevier, vol. 90(C), pages 235-253.
    4. Miroslav Verbič & Boris Majcen & Olga Ivanova & Mitja Čok, 2011. "R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 67-89.
    5. Bye, Brita & Fæhn, Taran & Heggedal, Tom-Reiel, 2009. "Welfare and growth impacts of innovation policies in a small, open economy; an applied general equilibrium analysis," Economic Modelling, Elsevier, vol. 26(5), pages 1075-1088, September.
    6. Voyvoda, Ebru & Yeldan, Erinç, 2015. "Public policy and growth in Canada: An applied endogenous growth model with human and knowledge capital accumulation," Economic Modelling, Elsevier, vol. 50(C), pages 298-309.
    7. Zuzana Smeets Kristkova & Edward Smeets & Hans van Meijl, 2016. "Agricultural R&D investments, biofuel policy and food security – a CGE analysis," EcoMod2016 9966, EcoMod.
    8. Ana Medina-López & Montserrat Jiménez-Partearroyo & Ángeles Cámara, 2023. "A Dynamic CGE Model for Optimization in Business Analytics: Simulating the Impact of Investment Shocks," Mathematics, MDPI, vol. 12(1), pages 1-42, December.
    9. Bye Brita & Faehn Taran & Grünfeld Leo A., 2011. "Growth and Innovation Policy in a Small, Open Economy: Should You Stimulate Domestic R&D or Exports?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-41, July.
    10. Giorgio Garau & Patrizio Lecca, 2015. "The Impact of Regional R&D Subsidy in a Computable General Equilibrium Model," International Regional Science Review, , vol. 38(4), pages 319-357, October.
    11. Martin Aarøe Christensen, 2015. "A CGE model with ICT and R&D-driven endogenous growth: A detailed model description," JRC Research Reports JRC97908, Joint Research Centre.
    12. Hong, Chanyoung & Yang, Heewon & Hwang, Wonsik & Lee, Jeong-Dong, 2014. "Validation of an R&D-based computable general equilibrium model," Economic Modelling, Elsevier, vol. 42(C), pages 454-463.
    13. Zuzana KRISTKOVA, 2013. "Analysis of Private R&D Effects in a CGE Model with Capital Varieties: The Case of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(3), pages 262-287, July.
    14. Gomes, Alexandre & Perobelli, Fernando & Pio, João, 2016. "The Impact of expenditure on R & D within the Brazilian economy: an approach to Computable General Equilibrium," Conference papers 330169, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Chanyoung Hong & Jeong-Dong Lee, 2016. "Macroeconomic effects of R&D tax credits on small and medium enterprises," Economic Systems Research, Taylor & Francis Journals, vol. 28(4), pages 467-481, October.
    16. Miroslav Verbič & Boris Majcen & Olga Ivanova & Mitja Čok, 2011. "R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 67-89, March.
    17. Muhammad Imran & Gu Zhang & HuSen An, 2017. "Impact of market access and comparative advantage on regional distribution of manufacturing sector," China Finance and Economic Review, Springer, vol. 5(1), pages 1-14, December.

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