CGE analysis of R&D investment policy considering trade-offs between economic growth and stability

Won-Sik Hwang, Yeongjun Yeo, Inha Oh (), Chanyoung Hong, Sungmoon Jung, Heewon Yang and Jeong-Dong Lee ()

Science and Public Policy, 2021, vol. 48, issue 3, 295-308

Abstract: This study analysed economic growth and industrial structure under different conditions on research and development (R&D) investment. To simulate counterfactual scenarios, we built a recursive dynamic computable general equilibrium model named as Technology and Economy Modelling for Innovation Policy assessment (TEMIP) that focuses on private and public R&D investments and their net effects from a macroeconomic perspective. The simulation shows gross domestic product increases rapidly in South Korea when a given amount of expenditure is spent on public R&D activities rather than private R&D. Moreover, our simulation results imply that resource allocation for R&D investments should be elaborated through considering whether the ultimate policy goal is oriented towards economic growth or stability.

Keywords: R&D investment; industrial growth; economic stability; computable general equilibrium (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:oup:scippl:v:48:y:2021:i:3:p:295-308.

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