Suchergebnisse

An endogenous growth model with long waves of growth, underlining the distinction between science and technology, is constructed. Scientific progress accelerates the rate of technological progress, but diminishing returns to technological research decelerates it. This process repeats itself with endogenous clustering of innovations. We show that higher trend (long‐run) growth is associated with more frequent waves of economic activity. Moreover, we identify a trade‐off between actual and trend growth rates when technological research activities are subsidized.

This paper sheds new light on the interaction between growth and output fluctuations. Our approach is different from the literature in that we analyse how endogenous fluctuations are affected by a faster productivity growth in the long run. Main results: (i) expansion (or contraction) occurs more (or less) frequently, (ii) expansion becomes milder but contraction severer, (iii) the amplitude of fluctuations becomes larger, (iv) the variance of output changes ambiguously, indicating a non‐monotonic relationship. We also investigate how an R&D subsidy alters the nature of output fluctuations and re‐examine its effect on technological change in the presence of recurrent cycles. The result questions the widely‐accepted theoretical implication that a research subsidy unambiguously promotes technological progress.

To explain the rise in the college wage premium in developed economies in the past decades, the present paper examines the effects of technological progress on workers' effort incentives, which determine the effective labor supply. Five effort incentive effects of technological progress are identified, and through these we obtain a number of results. Firstly, we establish that wage inequality can increase following an acceleration in skill-neutral technological progress. Secondly, an increase in skill-biased technological progress means, (i) skilled wages overshoot, (ii) unskilled wages undershoot, and hence (iii) wage inequality overshoots their respective long-run values. Thirdly, endogenising the number of skilled and unskilled workers on the basis of economic incentives does not eliminate wage inequality even in the long run. Fourthly, we can obtain hysteresis effects in the determination of long-run wage inequality. Finally, government policies which raise the equilibrium rate of unemployment are likely to reduce the impact of technical progress on inequality, and this may help to explain the relative increase in inequality in the US and UK compared with other European economies. Our focus on the supply-side complements studies which emphasize the impact of skill-biased technological progress on relative demand for skill workers.

We focus on the link between political instability due to uncertain electoral outcomes and economic growth, through the impact on a government's decisions on how to allocate government expenditure between public consumption and investment. Using an endogenous growth model with partisan electoral effects, we demonstrate that political uncertainty will generate a steady-state equilibrium growth rate which is inefficient and too low. We also use a newly-constructed political data set to estimate panel regressions for several OECD economies over a period 1960-95. Our empirical evidence on the effects of political variables on tax and spending decisions supports our theoretical results.

We set out an infinite-horizon political economy model with partisan & office motivation effects in an endogenous growth context to demonstrate that the existence of political uncertainty regarding re-election tends to reduce the amount of public investment by incumbent governments & underlies a switch from government investment to government consumption, thereby reducing growth. The political equilibrium is inefficient & so does not maximise social welfare. Using panel data regressions we show, for OECD countries, that there is empirical support for the hypothesis that political uncertainty tends to reduce public investment, & that there are partisan effects in public investment decisions. 3 Tables, 4 Figures, 3 Appendixes, 47 References. [Copyright 2004 Elsevier B.V.]