How does risk or uncertainty in the productivity of research affect the growth rate of the economy? To answer this question, a model of endogenous technological change is used where sustained growth stems from intentional investments in R&D from profit-maximizing firms. The uncertainty arises...

This paper examines the effects of taxation on long-run growthin a two-sector endogenous growth model with (i) physical capitalas an input in the education sector and (ii) leisure as anadditional argument in the utility function. The analysis of theeffects of taxation - including income...

The analysis in this paper shows that unpredictable variations in economic productivity may have a positive or negative effect on the average growth rate of output. This theoretical ambiguity result is not solely determined by the value of the elasticity of intertemporal substitution (of...