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R&D Spillovers In An Endogenous Growth Model With Physical Capital, Human Capital, And Varieties

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  • Sequeira, Tiago Neves

Abstract

There is a family of models with physical and human capital and R&D for which convergence properties have been discussed [Lutz G. Arnold, European Economic Review 44, 1599–1605 (2000); Manuel Gómez, Studies in Nonlinear Dynamics and Econometrics 9(1), Article 5 (2005)]. However, spillovers in R&D have been ignored in this context. We introduce spillovers in this model and derive the steady-state and stability properties. This new feature implies that the model is characterized by a system of four differential equations. A unique balanced growth path, along with a two-dimensional stable manifold, is obtained under simple and reasonable conditions. Transition is oscillatory toward the steady state for plausible values of parameters. We discovered that these features are due to the presence of the R&D spillovers externality in the decentralized equilibrium.

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  • Sequeira, Tiago Neves, 2011. "R&D Spillovers In An Endogenous Growth Model With Physical Capital, Human Capital, And Varieties," Macroeconomic Dynamics, Cambridge University Press, vol. 15(02), pages 223-239, April.
  • Handle: RePEc:cup:macdyn:v:15:y:2011:i:02:p:223-239_99
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    Cited by:

    1. Pedro Mazeda Gil & André Almeida, & Sofia B.S.D. Castro,, 2015. "Flexible Transitional Dynamics in a Non-Scale Fully Endogenous Growth Model," CEF.UP Working Papers 1503, Universidade do Porto, Faculdade de Economia do Porto.
    2. Pierre-Richard Agénor & Baris Alpaslan, 2014. "Infrastructure and Industrial Development with Endogenous Skill Acquisition," Centre for Growth and Business Cycle Research Discussion Paper Series 195, Economics, The Univeristy of Manchester.
    3. 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.
    4. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, pages 252-275.
    5. Chen, Xi & Funke, Michael, 2012. "The dynamics of catch-up and skill and technology upgrading in China," BOFIT Discussion Papers 13/2012, Bank of Finland, Institute for Economies in Transition.
    6. Chen, Xi & Funke, Michael, 2013. "The dynamics of catch-up and skill and technology upgrading in China," Journal of Macroeconomics, Elsevier, pages 465-480.
    7. Gómez Manuel A. & Neves Sequeira Tiago, 2012. "Phases of Economic Development: Do Initial Endowments Matter?," The B.E. Journal of Macroeconomics, De Gruyter, pages 1-22.
    8. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, pages 252-275.
    9. Gómez Manuel A. & Sequeira Tiago Neves, 2012. "The Transitional Dynamics of an Endogenous Growth Model: Generalizing Production Functions," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 16(5), pages 1-27, December.
    10. Agenor, Pierre-Richard & Dinh, Hinh T., 2013. "Public policy and industrial transformation in the process of development," Policy Research Working Paper Series 6405, The World Bank.
    11. Gómez, Manuel A. & Sequeira, Tiago N., 2013. "Optimal R&D subsidies in a model with physical capital, human capital and varieties," Economic Modelling, Elsevier, vol. 30(C), pages 217-224.
    12. Baris Alpaslan, 2015. "Public Spending and Transitional Dynamics of an Innovation-Based Growth Model," Centre for Growth and Business Cycle Research Discussion Paper Series 199, Economics, The Univeristy of Manchester.
    13. Chen, Qianying & Funke, Michael & Paetz, Michael, 2012. "Market and non-market monetary policy tools in a calibrated DSGE model for mainland China," BOFIT Discussion Papers 16/2012, Bank of Finland, Institute for Economies in Transition.

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