The Government as a Promoter of Technological Change: An Endogenous Growth Model with Labor, Money and Debt

Salvador Rivas-Aceves (rivas.salvador@gmail.com) and Francisco Venegas-Martínez
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Salvador Rivas-Aceves: Investigador, Departamento de Economía, Área de Empresas, Finanzas e Innovación, Universidad Autónoma Metropolitana, Unidad Azcapotzalco, México, D.F.

Economía Mexicana NUEVA ÉPOCA, 2010, vol. XIX, issue 1, 91-117

Abstract: In the framework of a monetary economy with labor and debt (public and private), the effects of government as a promoting agent to boost up technological change are studied. Through a model of endogenous growth, the growth rates of all sectors are characterized in the perfect foresight equilibrium. Moreover, the impact on economic welfare of taxes and government spending to impulse technological change is assessed. Finally, in a simulation exercise, the initial optimal level of government spending (which maximizes welfare), in which the government should incur to adequately address technological change, is examined.

Keywords: endogenous growth; government spending; technological change; money; debt. (search for similar items in EconPapers)
JEL-codes: O33 O38 O42 (search for similar items in EconPapers)
Date: 2010
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