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R&D-based growth in the post-modern era

  • Strulik, Holger
  • Prettner, Klaus
  • Prskawetz, Alexia

Conventional R&D-based growth theory suggests that productivity growth is positively correlated with population size or population growth, an implication which is hard to see in the data. Here we integrate R&D-based growth into a unified growth setup with micro-founded fertility and schooling behavior. We then show how a Beckerian child quality-quantity trade-off explains why higher growth of productivity and income per capita are associated with lower population growth. The medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all developed countries - are thus much better than predicted by conventional R&D-based growth theory.

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Paper provided by Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON) in its series ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy with number 04/2011.

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Date of creation: 2011
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Handle: RePEc:zbw:tuweco:042011
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