Redistributive Innovation Policy, Inequality and Efficiency
Parantap Basu and
Yoseph Getachew ()
No 2017_02, CEGAP Working Papers from Durham University Business School
Using a heterogenous-agent growth model with in-house R&D and incomplete capital markets, we examine the efficiency and distributional e¤ects of alternative public R&D policies that target high-tech and low-tech sectors. We nd that such policies have important implication for efficiency, inequality and social mobility. A regressive public R&D investment nanced by income tax could boost growth and welfare via a positive e¤ect on individual savings and e¤ort. However, it could also discourage them via its effect on the efficiency inequality trade off. The relationship between public R&D spending and welfare is therefore hump shaped admitting an optimal degree of regressivity in public R&D spending. A case for optimal progressive public R&D investment, however, can be made with a properly designed R&D policy that combines consumption tax and investment subsidy policies.
New Economics Papers: this item is included in nep-dge, nep-ino and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
https://www.dur.ac.uk/resources/business/working-papers/RD_2017_02.pdf main text (application/pdf)
Working Paper: Redistributive Innovation Policy, Inequality and Efficiency (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:dur:cegapw:2017_02
Access Statistics for this paper
More papers in CEGAP Working Papers from Durham University Business School Durham University Business School, Mill Hill Lane, Durham DH1 3LB, England. Contact information at EDIRC.
Series data maintained by Tatiana Damjanovic ().