Public Funding for Basic Research in an Endogenous Growth Model
LUISS Guido Carli University - Arcelli Centre for Monetary and Financial Studies
November 15, 2007
Rivista di Politica Economica, November 2007
The paper deals with the effects of government policy promoting basic research as an incentive to economic growth. Government is included into a Schumpeterian endogenous growth model, in which, thanks to the income proceeding from proportional taxation of monopolistic enterprises profits, it is enabled to carry out basic research activities which match applied research carried out by private enterprises. The results obtained show how it is possible that government determine a taxation level able to optimize economic growth. The effectiveness will be determined by the market. In particular, high competition levels make government policy less effective.
Number of Pages in PDF File: 26
Keywords: Endogenous Growth, Basic Research
JEL Classification: O31, O38, O40Accepted Paper Series
Date posted: April 20, 2011
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