Discussion Paper
No. 2013-14 |
February 15, 2013
(In)Determinacy, Bargaining, and R&D Policies in an Economy with Endogenous Technological Change
Abstract
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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