On the global supply of basic research

Hans Gersbach and Maik Schneider

Journal of Monetary Economics, 2015, vol. 75, issue C, 123-137

Abstract: In a two-country Schumpeterian growth model, we study the incentives for basic research investments by governments in a globalized world. A country׳s basic research investments increase with the country׳s level of human capital and decline with its own market size. This may explain why some smaller countries invest so much in basic research. Compared with the optimal investments achievable when countries coordinate their basic research policies, a single country may over-invest in basic research. However, the total amount of decentralized basic research investments is always below the socially optimal investment level, which justifies policy coordination in this area.

Keywords: Basic research; Public goods; Economic growth; Coordination of governments (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (24)

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Working Paper: On the Global Supply of Basic Research (2015)
Working Paper: On the Global Supply of Basic Research (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:75:y:2015:i:c:p:123-137

DOI: 10.1016/j.jmoneco.2015.02.004

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