Discussion Paper

No. 2013-14 | February 15, 2013

Chung-hui Lai

(In)Determinacy, Bargaining, and R&D Policies in an Economy with Endogenous Technological Change

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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.

JEL Classification

O30 L00 O41

Cite As

Chung-hui Lai (2013). (In)Determinacy, Bargaining, and R&D Policies in an Economy with Endogenous Technological Change. Economics Discussion Papers, No 2013-14, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-14

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