Financial Development, Econmic Growth and R&D Cyclical Movement

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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Year of publication:	2013
Authors:	Fung, Ka Wai Terence ; Lau, Chi Keung Marco

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Type of publication:	Book / Working Paper
Language:	English
Notes:	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
Classification:	E30 - Prices, Business Fluctuations, and Cycles. General ; O3 - Technological Change; Research and Development ; O4 - Economic Growth and Aggregate Productivity ; O40 - Economic Growth and Aggregate Productivity. General
Source:	BASE

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