IDEAS home Printed from https://ideas.repec.org/a/fau/fauart/v63y2013i3p262-287.html
   My bibliography  Save this article

Analysis of Private R&D Effects in a CGE Model with Capital Varieties: The Case of the Czech Republic

Author

Abstract

In view of the increasing importance of private research in the Czech economy and elsewhere in Europe, this paper attempts to quantify the effect of private R&D on economic growth by applying a Computable General Equilibrium (CGE) model which incorporates the effects of capital varieties following Romer’s theory of endogenous growth. It was discovered that the dynamics of GDP growth are positively related to the production of capital varieties and the elasticity of substitution between homogenous and variety capital. For the Czech Republic, a small and export-oriented economy, support for private R&D can be particularly beneficial since it stimulates the exports of important industries. However, with regard to households, a policy of stimulating R&D could cause short-term adverse effects due to growing unemployment resulting from the substitution of labor for capital varieties.

Suggested Citation

  • 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.
  • Handle: RePEc:fau:fauart:v:63:y:2013:i:3:p:262-287
    as

    Download full text from publisher

    File URL: http://journal.fsv.cuni.cz/storage/1276_262-87---kristkova.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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.
    2. Michal Kejak & David Vavra, 2004. "Factor Accumulation Story: Any Unfinished Business?," CERGE-EI Working Papers wp220, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Kejak, Michal & Seiter, Stephan & Vavra, David, 2004. "Accession trajectories and convergence: endogenous growth perspective," Structural Change and Economic Dynamics, Elsevier, vol. 15(1), pages 13-46, March.
    4. Kamil Dybczak & David Vonka & Nico van der Windt, 2008. "The Effect of Oil Price Shocks on the Czech Economy," Working Papers 2008/5, Czech National Bank, Research Department.
    5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    6. Diao, Xinshen & Roe, Terry & Yeldan, Erinc, 1999. "Strategic policies and growth: an applied model of R&D-driven endogenous growth," Journal of Development Economics, Elsevier, pages 343-380.
    7. Kristkova, Zuzana & Ratinger, Tomas & Majerova, Jana, 2011. "Modeling the efficiency of the agri-environmental payments to Czech agriculture in a CGE framework incorporating public goods approach," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99422, European Association of Agricultural Economists.
    8. Kiula, Olga & Markandya, Anil & Ščasný, Milan & Menkyna Tsuchimoto, Fusako, 2014. "The Economic and Environmental Effects of Taxing Air Pollutants and CO2: Lessons from a Study of the Czech Republic," MPRA Paper 66599, University Library of Munich, Germany, revised Oct 2015.
    9. Arjan Lejour & Hugo Rojas-Romagosa, 2008. "International spillovers of domestic reforms: the joint application of the Lisbon Strategy in the EU," CPB Discussion Paper 105, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Bye, Brita & Jacobsen, Karl, 2011. "Restricted carbon emissions and directed R&D support; an applied general equilibrium analysis," Energy Economics, Elsevier, vol. 33(3), pages 543-555, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Di Comite & D'Artis Kancs, 2015. "Macro-Economic Models for R&D and Innovation Policies - A Comparison of QUEST, RHOMOLO, GEM-E3 and NEMESIS," JRC Working Papers JRC94323, Joint Research Centre (Seville site).
    2. Martin Aarøe Christensen, 2015. "A CGE model with ICT and R&D-driven endogenous growth: A detailed model description," JRC Working Papers JRC97908, Joint Research Centre (Seville site).

    More about this item

    Keywords

    research and development; capital varieties; CGE model; economic growth; monopolistic competition; subsidies; Czech Republic;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:63:y:2013:i:3:p:262-287. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova) or (Christopher F Baum). General contact details of provider: http://edirc.repec.org/data/icunicz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.