On the Global Supply of Basic Research
In this paper we study the incentives for basic-research investments by governments in a globalized world. For this purpose, we develop a two-country Schumpeterian growth model in which each country chooses its basic-research investments. We find that a country's basic-research investments increase with the country's level of human capital and decline with its own market size. This may explain the large basic-research investments by small open economies. Compared with the optimal investments achievable when countries coordinate their basic-research policies, a single country may over-invest in basic research. However, in the decentralized case the total amount of basic-research investments is always below the socially optimal investment level, which justifies policy coordination in this area.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +41 44 632 03 87
Fax: +41 44 632 13 62
Web page: http://www.cer.ethz.ch
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Brooks, Harvey, 1994. "The relationship between science and technology," Research Policy, Elsevier, vol. 23(5), pages 477-486, September.
- Hans Gersbach & Maik T. Schneider & Olivier Schneller, 2010.
"Basic Research, Openness, and Convergence,"
CER-ETH Economics working paper series
10/139, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Guido Cozzi & Silvia Galli, 2009.
"Science-Based R&D In Schumpeterian Growth,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 56(s1), pages 474-491, 09.
- Guido Cozzi & Silvia Galli, 2009.
"Upstream Innovation Protection: Common Law Evolution and the Dynamics of Wage Inequality,"
2009_20, Business School - Economics, University of Glasgow.
- Cozzi, Guido & Galli, Silvia, 2011. "Upstream innovation protection: common law evolution and the dynamics of wage inequality," MPRA Paper 31902, University Library of Munich, Germany.
- Charles I. Jones & Paul M. Romer, 2010.
"The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 2(1), pages 224-45, January.
- Charles I. Jones & Paul M. Romer, 2009. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," NBER Working Papers 15094, National Bureau of Economic Research, Inc.
- Park, Walter G., 1998. "A theoretical model of government research and growth," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 69-85, January.
- Cozzi, Guido & Galli, Silvia, 2013.
"Privatization of Knowledge: Did the U.S. Get It Right?,"
Economics Working Paper Series
1307, University of St. Gallen, School of Economics and Political Science.
- Guido Cozzi & Silvia Galli, . "Privatization of Knowledge: Did the U.S. Get It Right?," Working Papers 2008_01, Business School - Economics, University of Glasgow.
When requesting a correction, please mention this item's handle: RePEc:eth:wpswif:13-175. 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: ()
If references are entirely missing, you can add them using this form.