Overview
This book investigates the determinants of technological change at the industry level and its role, in conjunction with capital investment, in the process of aggregate economic growth to illustrate the trade-off between growth in the short term and in the long run. The study identifies competition in research and development (R&D) and in output markets as key determinants of the intensity of research, which in turn determines the technological evolution of an industry. The extent of competition itself, however, depends on the opportunities for technological innovation. Relationships between the extent of competition, research efforts, prices and quantities produced, profitability, and input demands are explored and the pace of industrial evolution is analyzed.This book develops a general model of an economy to study the roles played by investment in capital accumulation and research. It shows that the long run rate of economic growth increases with competition even when such competition prevents the implementation of most of the research. The impact of government policy on competition, R&D, and economic growth is then examined. A reduction of government with lower wage taxes is shown to lead to more competition and a higher rate of economic growth in the long run. However, the immediate impact of such a policy is demonstrated to be the opposite, with a prolonged period of wet growth rates of output and capital arising during a transition phase.
Synopsis
This book investigates the determinants of technological change at the industry level and its role, in conjunction with capital investment, in the process of aggregate economic growth to illustrate the trade-off between growth in the short term and in the long run. The study identifies competition in research and development (R&D) and in output markets as key determinants of the intensity of research, which in turn determines the technological evolution of an industry. The extent of competition itself, however, depends on the opportunities for technological innovation. Relationships between the extent of competition, research efforts, prices and quantities produced, profitability, and input demands are explored and the pace of industrial evolution is analyzed.
This book develops a general model of an economy to study the roles played by investment in capital accumulation and research. It shows that the long run rate of economic growth increases with competition even when such competition prevents the implementation of most of the research. The impact of government policy on competition, R&D, and economic growth is then examined. A reduction of government with lower wage taxes is shown to lead to more competition and a higher rate of economic growth in the long run. However, the immediate impact of such a policy is demonstrated to be the opposite, with a prolonged period of wet growth rates of output and capital arising during a transition phase.