The equilibrium allocation of creative capital to R&D in a dynamic creative region

Amitrajeet Batabyal and Hamid Beladi

MPRA Paper from University Library of Munich, Germany

Abstract: In this note, we analyze a stylized creative region that is populated by members of the creative class. The representative individual in this region possesses a constant relative risk aversion (CRRA) utility function. The existing creative capital is used to produce a final consumption good and to conduct R&D. We first derive the equilibrium level of creative capital that is allocated to the R&D sector. Next, we show how this level is affected by changes in the parameters and in some of the model constants. Finally, we discuss the policy implications of our comparative statics results.

Keywords: Creative Capital; Creative Class; Dynamics; Economic Growth; R&D (search for similar items in EconPapers)
JEL-codes: O32 R11 (search for similar items in EconPapers)
Date: 2014-02-09
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Citations: View citations in EconPapers (1)

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