Research & Development and Long-Term Economic Growth: A Bayesian Model Averaging Analysis

Roman Horvath

No 2011/19, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: We examine the effect of research and development (R&D) on long-term economic growth using the Bayesian model averaging (BMA) to deal rigorously with model uncertainty. Previous empirical studies investigated the effect of dozens of regressors on long-term growth, but they did not examine the effect of R&D due to data unavailability. We extend these studies by proposing to capture the R&D intensity by the number of Nobel prizes in science. Using our indicator, our estimates show that R&D exerts a positive effect on long-term growth with posterior inclusion probability of 0.25 using our preferred parameter and model priors.

Keywords: research and development; economic growth; Bayesian model averaging. (search for similar items in EconPapers)
JEL-codes: O10 O30 O32 (search for similar items in EconPapers)
Pages: 14pages
Date: 2011-06, Revised 2011-06
New Economics Papers: this item is included in nep-fdg and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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