Endogenous Growth with Negative Intertemporal R&D Spillovers
Year: 2018
Type: article
Abstract: Semi-endogenous growth models propose that in the absence of population growth, consumption's long-run growth rate is zero. The reason are negative intertemporal R&D spillovers, motivated by the exhaustion of technological opportunities. In the present paper, we complement this exhaustion effect of R&D by a positive productivity effect: a higher level of technical knowledge increases the profits that accrue to succesful innovators. Thus, even in the long run, R&D investment is profitable, and consumption's growth rate remains positive. Our model reinstates the essential result of endogenous growth theory according to which policy may affect the long-run growth rate. Furthermore, our model holds excessive growth as a possibility.
Source: Working Paper Series
Author: Hornung, Dietmar
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7215420490