Endogenous vs. Semi-endogenous Growth in a Two-R&D-Sector Model
This paper contributes to the endogenous versus semi-endogenous growth debate by establishing that semi-endogenous growth is more general than endogenous growth in a two-R&D-sector growth model. It is demonstrated that endogenous growth requires two "knife-edge" conditions of parameters. This finding (i) is in sharp contrast to recent two-R&D-sector models that show that long-run growth is endogenous, and (ii) resurrects the policy conclusion of semi-endogenous growth that government policy is not effective in raising the underlying growth rate of an economy. The driving force of these results is knowledge spillovers between two R&D activities, which are largely neglected in existing studies.
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Volume (Year): 110 (2000)
Issue (Month): 462 (March)
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