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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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    Cited by:

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    2. Faishal Fadli & Ouyang Hongbing & Yaqing Liu, 2020. "Earmarking Tax for Indonesia's Economic Growth through the Education and Health Sector in the Long and Short Term Period," Business and Economic Research, Macrothink Institute, vol. 10(1), pages 1-39, March.
    3. Dissou, Yazid & Didic, Selma & Yakautsava, Tatsiana, 2016. "Government spending on education, human capital accumulation, and growth," Economic Modelling, Elsevier, vol. 58(C), pages 9-21.
    4. Zuzana Smeets Kristkova & Michiel van Dijk & Hans van Meijl, 2015. "Long-term projections of global food security with R&D-driven technological progress," EcoMod2015 8601, EcoMod.
    5. 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.
    6. Akinola G W & Bokana K G, 2018. "Human Capital, Higher Education Enrolment and Economic Growth in the SSA Countries (Panel Model Approach)," Journal of Economics and Behavioral Studies, AMH International, vol. 9(6), pages 215-226.
    7. Yazid Dissou & Selma Didic, 2012. "Government spending on education, human capital accumulation, taxes and growth: a multisector dynamic general equilibrium analysis," EcoMod2012 4540, EcoMod.

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    More about this item

    Keywords

    endogenous growth; general equilibrium modelling; R&D; Slovenia;
    All these keywords.

    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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