On the Design of Basic-Research Policy

Gersbach, Hans; Schneider, Maik T.; Schneller, Olivier

doi:10.2139/ssrn.1090246

Download This Paper

Open PDF in Browser

Add Paper to My Library

On the Design of Basic-Research Policy

CER-ETH Center of Economic Research at ETH Zurich, Working Paper No. 08/79

44 Pages Posted: 5 Feb 2008

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Olivier Schneller

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: January 1, 2008

Abstract

We augment a Schumpeterian growth model with a public basic-research sector to examine how much a country should invest in basic research. We find that the closer the country is to the world's technological frontier the more the government should invest in basic research. Basic-research expenditures are increasing with a country's degree of openness as long as innovation sizes are small. We provide possible explanations for the empirical evidence available on basic-research expenditures across countries.

Keywords: basic research, openness, distance to frontier, economic growth

JEL Classification: O31, O38

Suggested Citation: Suggested Citation

Gersbach, Hans and Schneider, Maik T. and Schneller, Olivier, On the Design of Basic-Research Policy (January 1, 2008). CER-ETH Center of Economic Research at ETH Zurich, Working Paper No. 08/79, Available at SSRN: https://ssrn.com/abstract=1090246 or http://dx.doi.org/10.2139/ssrn.1090246