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Education, Innovation, and Long-Run Growth

  • Katsuhiko Hori

    ()

    (Institute of Economic Research, Kyoto University)

  • Katsunori Yamada

    ()

    (Institute of Social and Economic Research, Osaka University)

This study augments a second-generation Schumpeterian growth model to employ human capital explicitly. We clarify the general-equilibrium interactions of subsidy policies to R&D and human capital accumulation in a unified framework. Despite a standard intuition that subsidizing these growth-enhancing activities is always mutually growth promoting, we find asymmetric effects for subsidies on R&D and those on education. Our theoretical result of asymmetric policy effects provides an important empirical caveat that empirical researchers may find false negative relationships between education subsidies and the output growth rate, if they merely rely on the standard human capital model.

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File URL: http://www.kier.kyoto-u.ac.jp/DP/DP798.pdf
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Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 798.

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Date of creation: Nov 2011
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Handle: RePEc:kyo:wpaper:798
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  1. Madsen, Jakob & Ang, James & Banerjee, Rajabrata, 2010. "Four Centuries of British Economic Growth: The Roles of Technology and Population," MPRA Paper 23510, University Library of Munich, Germany.
  2. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  3. Ang, James & Madsen, Jakob, 2009. "Can Second-Generation Endogenous Growth Models Explain The Productivity Trends and Knowledge Production In the Asian Miracle Economies?," MPRA Paper 17543, University Library of Munich, Germany.
  4. Dinopoulos, Elias & Thompson, Peter, 1998. "Schumpeterian Growth without Scale Effects," Journal of Economic Growth, Springer, vol. 3(4), pages 313-35, December.
  5. Hulya Ulku, 2007. "R&D, innovation, and growth: evidence from four manufacturing sectors in OECD countries," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 513-535, July.
  6. Jakob Madsen, 2008. "Semi-endogenous versus Schumpeterian growth models: testing the knowledge production function using international data," Journal of Economic Growth, Springer, vol. 13(1), pages 1-26, March.
  7. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
  8. Sergio T. Rebelo, 1990. "Long Run Policy Analysis and Long Run Growth," NBER Working Papers 3325, National Bureau of Economic Research, Inc.
  9. Nicolas Serrano-Velarde & Douglas Hanley & Ufuk Akcigit, 2011. "Back to Basics: Private and Public Investment in Basic R&D and Macroeconomic Growth," 2011 Meeting Papers 1196, Society for Economic Dynamics.
  10. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464.
  11. Stephen Machin & Panu Pelkonen & Kjell Salvanes, 2008. "Education and mobility," LSE Research Online Documents on Economics 28277, London School of Economics and Political Science, LSE Library.
  12. Arnold, Lutz G., 1998. "Growth, Welfare, and Trade in an Integrated Model of Human-Capital Accumulation and Research," Journal of Macroeconomics, Elsevier, vol. 20(1), pages 81-105, January.
  13. Peretto, Pietro F, 1998. "Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
  14. Jinli Zeng, 2002. "Reexamining the Interaction between Innovation and Capital Accumulation," Departmental Working Papers wp0203, National University of Singapore, Department of Economics.
  15. Marios Zachariadis, . "R&D-Induced Growth in the OECD?," Departmental Working Papers 2001-02, Department of Economics, Louisiana State University.
  16. Connolly, Michelle & Peretto, Pietro F, 2003. "Industry and the Family: Two Engines of Growth," Journal of Economic Growth, Springer, vol. 8(1), pages 115-48, March.
  17. Grossmann, Volker, 2007. "How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 891-911, December.
  18. Madsen, Jakob B., 2010. "The anatomy of growth in the OECD since 1870," Journal of Monetary Economics, Elsevier, vol. 57(6), pages 753-767, September.
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