On the cyclicality of research and development
By: Barlevy, Gadi.
Material type:
ArticlePublisher: 2007Description: p.1131-164.Subject(s): Research
In:
American Economic ReviewSummary: Economists have recently argued recessions plays a useful role in fostering growth. Yet a major source of growth, R&D, is procyclical. This paper argues one reason for procyclical R&D is a dynamic externality inherent in R&D that makes enterpreneurs short-sighted and concentrate their innovation in books, even when it is optimal to concentrate it in recessions. Additional forces may imply that procyclical R&D is desirable, but equilibrium R&D is likely to be too procyclical, and macroeconomic shocks are likely to have overly persistent effects on output and make growth more costly than in the absence of such shocks. - Reproduced.
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | Volume no: 97, Issue no: 4 | Available | AR77000 |
Economists have recently argued recessions plays a useful role in fostering growth. Yet a major source of growth, R&D, is procyclical. This paper argues one reason for procyclical R&D is a dynamic externality inherent in R&D that makes enterpreneurs short-sighted and concentrate their innovation in books, even when it is optimal to concentrate it in recessions. Additional forces may imply that procyclical R&D is desirable, but equilibrium R&D is likely to be too procyclical, and macroeconomic shocks are likely to have overly persistent effects on output and make growth more costly than in the absence of such shocks. - Reproduced.
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