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Please use this identifier to cite or link to this item: http://hdl.handle.net/10481/31508

Title: R&D Policy in Economies with Endogenous Growth and Non-Renewable Resources
Authors: Agnani, Betty
Gutiérrez, María José
Iza, Amaia
Issue Date: 2007
Abstract: The aim of this paper is to analyze how active R&D policies affect the growth rate of an economy with endogenous growth and non-renewable resources. We know from Scholz and Ziemens (1999) and Groth (2006) that in infinitely lived agents (ILA) economies, any active R&D policy increases the growth rate of the economy. To see if this result also appears in economies with finite lifetime agents, we developed an endogenous growth overlapping generations (OLG) economy à la Diamond which uses non-renewable resources as essential inputs in final good’s production. We show analytically that a sufficient condition guaranteeing that an active R&D policy increases the growth rate of the economy actually implies a reduction of the use of the non-renewable resources. Numerically we show that in economies with low intertemporal elasticity of substitution (IES), active R&D policies lead the economy to increase the depletion of non-renewable resources. Nevertheless, we find that active R&D policies always imply increases in the endogenous growth rate, in both scenarios. Furthermore, when the IES coefficient is lower (greater) than one, active R&D policies affect the growth rate of the economy in the ILA more (less) than in OLG economies.
Sponsorship: Financial support from the Spanish Ministry of Education and Science, through Projects SEJ2006-12793/ECON, SEJ2007-62081/ECON and SEJ2006-10827/ECON, and Universidad del PaÌs Vasco through Grupo de InvestigaciÛn Consolidado UPV GIU06/41.
Publisher: Universidad de Granada. Departamento de Teoría e Historia Económica
Series/Report no.: The Papers;07/09
Keywords: Endogenous growth
R&D (Research and Development)
Non-renewable resources
Overlapping generations
Infinitely lived agents
Balanced growth path
URI: http://hdl.handle.net/10481/31508
Rights : Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License
Citation: Agnany, B.; Gutiérrez, M.J.; Iza, A. R&D Policy in Economies with Endogenous Growth and Non-Renewable Resources. Universidad de Granada. Departamento de Teoría e Historia Económica (2007). (The Papers; 07/09). [http://hdl.handle.net/10481/31508]
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