Within the current debate about the role of public research in the modern societies and the relations between public and private research, there is an increasing interest towards a possible rivalry between fundamental and applied research. Some preoccupations arise from the fact that the strong...

We develop a model that incorporates salient features of growth in modern economies. We combine the expanding-variety growth model through horizontal innovations with a hierarchy of basic and applied research. The former extends the knowledge base, while the latter commercializes it. Two-way...