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Financial Development, Econmic Growth and R&D Cyclical Movement

Fung, Ka Wai Terence and Lau, Chi Keung Marco (2013): Financial Development, Econmic Growth and R&D Cyclical Movement. Published in: Journal of Applied Economics and Business Research , Vol. 3, No. 3

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Abstract

This paper builds up an endogenous growth model à la Aghion and Howitt (1992) and Boucekkine et al (2005). We assume that R&D firms use only investment good as input, instead of final good as hypothesized in the above two models. We show that investment price will be a negative function of aggregate quality index; and thus decline over time. In this model, subsidy on R&D has growth-enhancing effect. Moreover, this model predicts unambiguously that R&D is procyclical.

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  • Financial Development, Econmic Growth and R&D Cyclical Movement. (deposited 31 Dec 2013 02:43) [Currently Displayed]
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