Testing R&D-Based Endogenous Growth Models

44 Pages Posted: 8 Apr 2017

See all articles by Peter Kruse-Andersen

Peter Kruse-Andersen

University of Copenhagen - Department of Economics

Date Written: April 6, 2017

Abstract

R&D-based growth models are tested using US data for the period 1953-2014. A general growth model is developed which nests the model varieties of interest. The model implies a cointegrating relationship between multifactor productivity, research intensity, and employment. This relationship is estimated using cointegrated VAR models. The results provide evidence against the widely used fully endogenous variety and in favor of the semi-endogenous variety. Forecasts based on the empirical estimates suggest that the slowdown in US productivity growth will continue. Particularly, the annual long-run growth rate of GDP per worker converges to between zero and 1.1 pct.

Keywords: Endogenous growth, semi-endogenous growth, total factor productivity (TFP), research and development (R&D), time series econometrics, cointegration

JEL Classification: C32, E24, O31, O41, O47, O51

Suggested Citation

Kruse-Andersen, Peter, Testing R&D-Based Endogenous Growth Models (April 6, 2017). Available at SSRN: https://ssrn.com/abstract=2947528 or http://dx.doi.org/10.2139/ssrn.2947528

Peter Kruse-Andersen (Contact Author)

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

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