On the global supply of basic research
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Author / Producer
Date
2013-02
Publication Type
Working Paper
ETH Bibliography
yes
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Abstract
In this paper we study the incentives for basic-research investments by governments in a globalized world. For this purpose, we develop a two-country Schumpeterian growth model in which each country chooses its basic-research investments. We find that a country’s basic-research investments increase with the country’s level of human capital and decline with its ownmarket size. This may explain the large basic-research investments by small open economies. Compared with the optimal investments achievable when countries coordinate their basic-research policies, a single country may over-invest in basic research. However, in the decentralized case the total amount of basic-research investments is always below the socially optimal investment level, which justifies policy coordination in this area.
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published
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Book title
Journal / series
Economics Working Paper Series
Volume
13/175
Pages / Article No.
Publisher
CER-ETH – Center of Economic Research at ETH Zurich
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Edition / version
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Software
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Date collected
Date created
Subject
Basic research; Public goods; Economic growth; Coordination of governments
Organisational unit
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
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