Agricultural R&D and Economic Growth

Elias Dinopoulos

No 54690, Food Security International Development Working Papers from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: The paper develops a dynamic general-equilibrium model of Schumpeterian growth which is fueled by industrial and agricultural R&D. The former is private and results in better production processes, whereas the latter is government-financed (public and applied) R&D and generates better crop varieties. The arrival of innovations in either sector is stochastic. The model is used to calculate the steady-state equilibrium and the growth-maximizing mix of agricultural and industrial R&D investments. It is also used to highlight the properties of social rates of return (ROR) of R&D which are based on partial-equilibrium calculations. These measures overestimate the true agricultural social ROR and underestimate the true industrial social ROR of R&D investments. This systematic bias increases with the size of the R&D project under evaluation.

Keywords: International Development; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 41
Date: 1996
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:midiwp:54690

DOI: 10.22004/ag.econ.54690

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