Binomial R&D Races and Growth

John M. Hartwick

No 1022, Working Papers from Queen's University, Department of Economics

Abstract: In each period, we have an R&D race among N competitive R&D firms, each with probability π of discovering a successful new technique for producing an intermediate good used in producing the economy's final consumption good. The winner of a race earns a monopoly profit over a generally uncertain interval. Each R&D firm faces distinctive "lottery" and "duration" uncertainty in each period. Numerical examples illustrate the growth behavior of the economy linked to the R&D sector.

Keywords: binomial R&D race; growth (search for similar items in EconPapers)
JEL-codes: O41 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino and nep-mic
Date: Written
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