IDEAS home Printed from https://ideas.repec.org/p/emo/wp2003/0315.html
   My bibliography  Save this paper

R&D and Real Interest Rate in the U.S.: Theory and Empirics

Author

Listed:
  • Constantine Alexandrakis

Abstract

In this paper we investigate the relationship between the long-run real interest rate and the share of resources devoted to research in the U.S. In contrast to what is predicted by many R&D-based growth models we find the two to be positively correlated. We then calibrate a model with endogenous technological change and examine if it can produce a positive relationship between the two variables. Our results provide an appealing explanation for the observed low-frequency variations in the share of labor employed in R&D and the long-run real interest rate and for the productivity slowdown.

Suggested Citation

  • Constantine Alexandrakis, 2003. "R&D and Real Interest Rate in the U.S.: Theory and Empirics," Emory Economics 0315, Department of Economics, Emory University (Atlanta).
  • Handle: RePEc:emo:wp2003:0315
    as

    Download full text from publisher

    File URL: http://economics.emory.edu/home/assets/workingpapers/alexandrakis_03_15_paper.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Zvi Griliches, 1998. "Productivity, R&D, and the Data Constraint," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 347-374 National Bureau of Economic Research, Inc.
    3. Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
    4. Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
    5. Griliches, Zvi, 1988. "Productivity Puzzles and R&D: Another Nonexplanation," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 9-21, Fall.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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:emo:wp2003:0315. 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: (Sue Mialon). General contact details of provider: http://edirc.repec.org/data/deemous.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.