Growth, R&D, and uncertainty

Mizuki Tsuboi

Economic Modelling, 2020, vol. 87, issue C, 394-400

Abstract: I develop and analytically solve the stochastic Romer model in which the creation of ideas is driven by a stochastic process. I show that higher uncertainty about R&D, through the reallocation effects of resources among sectors, slows down economic growth and deteriorates welfare. The results suggest that persistently high uncertainty tends to severely restrict the scope of sustained income growth.

Keywords: R&D; Growth; Welfare; Uncertainty (search for similar items in EconPapers)
JEL-codes: C60 O33 O41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:87:y:2020:i:c:p:394-400

DOI: 10.1016/j.econmod.2019.08.012

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