Endogenous Technological Change under Uncertainty

Paul de Hek ()

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: How does risk or uncertainty in the productivity of research affect the growth rate of the economy? To answer this question, a model of endogenous technological change is used where sustained growth stems from intentional investments in R&D from profit-maximizing firms. The uncertainty arises from the productivity of these investments in R&D. The main result of this analysis is that the relationship between long-run growth and uncertainty (on the productivity of knowledge creation) depends on two main factors - the returns to scale in knowledge creation (increasing or non-increasing) and the value of the elasticity of intertemporal substitution (higher or lower than some critical value). Based on empirical studies on the returns to scale in knowledge creation (”non-increasing”) and the value of the elasticity of intertemporal substitution (”higher than the critical value”), we expect a negative relationship between long-run growth and uncertainty regarding the productivity of knowledge creation.

Keywords: Long-run growth; Technological change; Uncertainty (search for similar items in EconPapers)
JEL-codes: O3 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2003-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://degit.sam.sdu.dk/papers/degit_08/C008_025.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to degit.sam.sdu.dk:80 (No such host is known. )

Related works:
Working Paper: Endogenous Technological Change under Uncertainty (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:deg:conpap:c008_025

Access Statistics for this paper

More papers in DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade Contact information at EDIRC.
Bibliographic data for series maintained by Jan Pedersen ().