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R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth

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  • Verbic, Miroslav
  • Majcen, Boris
  • Cok, Mitja

Abstract

In the article, we model R&D as a major endogenous growth element in a small open economy general equilibrium framework and consider several R&D policy scenarios for Slovenia. Increase of the share of sectoral investment in R&D that is deductible from the CIT and increase of government spending on R&D turned out to be the most effective policy measures. While the former policy measure is still in part followed by an undesired dividend increase, the increase of government spending on R&D boosts long-run productivity in the economy, thus increasing the future value of firms, which is reflected in a desire dividend increase. The households that would gain more utility from such policy scenarios are those with more skilled and highly skilled labour, but not the very top earners in the economy.

Suggested Citation

  • Verbic, Miroslav & Majcen, Boris & Cok, Mitja, 2009. "R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," MPRA Paper 17819, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17819
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    References listed on IDEAS

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    Cited by:

    1. Haytem Ahmed Troug & Rashid Sbia, 2015. "Testing for the Presence of Asymmetric Information in the Oil Market: A Vector Autoregression Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 753-762.
    2. Hong, Chanyoung & Yang, Heewon & Hwang, Wonsik & Lee, Jeong-Dong, 2014. "Validation of an R&D-based computable general equilibrium model," Economic Modelling, Elsevier, vol. 42(C), pages 454-463.
    3. Zuzana Smeets Kristkova & Edward Smeets & Hans van Meijl, 2016. "Agricultural R&D investments, biofuel policy and food security – a CGE analysis," EcoMod2016 9966, EcoMod.
    4. Cuma BOZKURT, 2015. "R&D Expenditures and Economic Growth Relationship in Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 188-198.
    5. Pop Silaghi, Monica Ioana & Alexa, Diana & Jude, Cristina & Litan, Cristian, 2014. "Do business and public sector research and development expenditures contribute to economic growth in Central and Eastern European Countries? A dynamic panel estimation," Economic Modelling, Elsevier, vol. 36(C), pages 108-119.
    6. Reiljan, Janno & Paltser, Ingra, 2013. "The implementation of research and development policy in European and Asian countries," Discourses in Social Market Economy 2013-03, OrdnungsPolitisches Portal (OPO).

    More about this item

    Keywords

    endogenous growth; general equilibrium modelling; R&D; Slovenia;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • 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
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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