In this paper, the effects of uncertainty and of various policy instruments on the lengthand attractiveness of private research projects are studied. Research expenditure can beregained from quasi-rents that are earned by exploiting patents on the fruits of research.The accumulation of knowledge...

The price and quantity indices proposed in this paper exactly and unconditionally pass the product test, E = PQ. Because the indices are measured over single sets of products they can be used for the comparison of sets that do not contain the same types of products. Changes in product variety do...

In this paper idiosyncratic uncertainty is introduced in a model of economic growth with an increasing variety of intermediate products. Both the costs of producing intermediate products and their quality are uncertain for all producers at all times. Using the property of the model that the...

There is considerable interest in understanding how important market frictions are in stifling the transmission of ideas from one firm to another. Although the theoretical literature emphasizes the importance of these frictions, direct empirical evidence on them is limited. We use comprehensive...

During the last twenty years the share of researchers in the workforce has been rising in OECD countries. The consistency of this pattern suggests that it is not a transitional phenomenon. This paper demonstrates that the rise of research can occur in the steady state when schooling inequality...

Distributed Denial of Service (DDoS) attacks are a frequently occurring type of cybercrime, with potentially large costs to the real economy. We propose a simple model of the size and direction of DDoS attacks. The main predictions of the model are that effective botnets are located in...

This note shows that the antilog of Shannon’s entropy is a suitableindex of product variety for three reasons. First, for symmetricproduct types it is equal to the number of product types. Second, disaggregationof the underlying product set always leads to an increasein measured product...