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(In)determinacy, bargaining, and R&D policies in an economy with endogenous technological change

  • Lai, Chung-hui
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    In this paper, the author shows how the introduction of a bargaining game structure into a standard R&D endogenous growth model can be a potential source of local indeterminacy. He also shows that on a high-growth path, the government, by directly engaging in R&D activities and using R&D subsidies, may not enhance economic growth. On a low-growth path, the government, by directly engaging in R&D activities and using R&D subsidies, may enhance economic growth.

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    Paper provided by Kiel Institute for the World Economy (IfW) in its series Economics Discussion Papers with number 2013-14.

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    Date of creation: 2013
    Date of revision:
    Handle: RePEc:zbw:ifwedp:201314
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    8. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
    9. Arnold, Lutz G. & Kornprobst, Wolfgang, 2008. "Comparative Statics And Dynamics Of The Romer R&D Growth Model With Quality Upgrading," Macroeconomic Dynamics, Cambridge University Press, vol. 12(05), pages 702-716, November.
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    12. Zeng, Jinli & Zhang, Jie, 2007. "Subsidies in an R&D growth model with elastic labor," Journal of Economic Dynamics and Control, Elsevier, vol. 31(3), pages 861-886, March.
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    16. Been-Lon Chen & Angus C. Chu, 2010. "A Note on R&D Spillovers, Multiple Equilibria and Indeterminacy," IEAS Working Paper : academic research 10-A002, Institute of Economics, Academia Sinica, Taipei, Taiwan.
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    18. Bester, Helmut, 1993. "Bargaining versus Price Competition in Markets with Quality Uncertainty," American Economic Review, American Economic Association, vol. 83(1), pages 278-88, March.
    19. Jang-Ting Guo & Chi-Ting Chin & Ching-Chong Lai, 2009. "Indeterminacy and Investment Adjustment Costs in an Endogenously Growing Small Open Economy," Working Papers 200913, University of California at Riverside, Department of Economics, revised Nov 2009.
    20. Christophe Chamley, 1991. "Externalities and Dynamics in Models of "Learning or Doing"," Boston University - Institute for Economic Development 17, Boston University, Institute for Economic Development.
    21. Benhabib Jess & Rustichini Aldo, 1994. "Introduction to the Symposium on Growth, Fluctuations, and Sunspots: Confronting the Data," Journal of Economic Theory, Elsevier, vol. 63(1), pages 1-18, June.
    22. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    23. Villas-Boas, Sofia B., 2006. "Vertical relationships between manufacturers and retailers: inference with limited data," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0z26d2v9, Department of Agricultural & Resource Economics, UC Berkeley.
    24. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 63(1), pages 113-142, June.
    25. 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.
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