Knowledge spillovers and the timing of R&D policy
In this paper we analyze how knowledge spillovers influence the optimal timing of R&D policy. We find that the optimal R&D subsidy profile may be falling, increasing or constant. The time profile of the subsidy rates is crucially dependent on the elasticity of scale in R&D production, i.e. the spillover parameter plus labor elasticity, and the sign of the optimal growth rate of the knowledge stock. Constant subsidy rates are only optimal in knife edge cases. The problems are solved using both an analytical framework and numerical simulations.
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- Reyer Gerlagh & Snorre Kverndokk & Knut Einar Rosendahl, 2007.
"Optimal Timing of Environmental Policy. Interaction between Environmental Taxes and Innovation Externalities,"
493, Research Department of Statistics Norway.
- Reyer Gerlagh & Snorre Kverndokk & Knut Einar Rosendahl, 2007. "Optimal Timing of Environmental Policy; Interaction Between Environmental Taxes and Innovation Externalities," Working Papers 2007.35, Fondazione Eni Enrico Mattei.
- Gerlagh , Reyer & Kverndokk , Snorre & Rosendahl , Knut Einar, 2007. "Optimal Timing of Environmental Policy: Interaction Between Environmental Taxes and Innovation Externalities," Memorandum 26/2006, Oslo University, Department of Economics.
- Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
- Heggedal, Tom-Reiel & Jacobsen, Karl, 2011. "Timing of innovation policies when carbon emissions are restricted: An applied general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 33(4), pages 913-937.
- Kverndokk, Snorre & Rosendahl, Knut Einar, 2007. "Climate policies and learning by doing: Impacts and timing of technology subsidies," Resource and Energy Economics, Elsevier, vol. 29(1), pages 58-82, January.
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