Economic growth and Income distribution: The case of Korean R&D Investment

Sungmoon Jung, Yeo Yeongjun and Jeong-Dong Lee ()

No 7045, EcoMod2014 from EcoMod

Abstract: In the article, we analyze that how the innovative activity affects to income redistribution, which have been considered for prolonged period. The effect of spending on R&D usually affects to higher income level; however, the lower income group also becomes easier to approach to high-tech devices since the internet have developed. Both of groups could earn same information in the same time in spite of different income level. According to the fact, we examine how the R&D investment impact to the each income group. We employ the dynamic Computational General Equilibrium (CGE) model in order to measure the aggregate effect, reflecting the channels of the positive and negative effects and considering the reactions of individual industries and economic agents that it follows in change of public and private R&D expenditure. The result reveals that the R&D spending affect positively to economic growth, but it brings about negative effect on income distribution. In addition, we find a skill-biased technological change in South Korea.

Keywords: South Korea; General equilibrium modeling (CGE); Growth (search for similar items in EconPapers)
Date: 2014-07-03
New Economics Papers: this item is included in nep-cse, nep-gro and nep-pbe
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