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Title: Subsidies in an R&D growth model with elastic labor
Authors: Zeng, J. 
Zhang, J. 
Keywords: Growth
Monopoly pricing
Issue Date: 2007
Citation: Zeng, J., Zhang, J. (2007). Subsidies in an R&D growth model with elastic labor. Journal of Economic Dynamics and Control 31 (3) : 861-886. ScholarBank@NUS Repository.
Abstract: This paper compares different subsidies in an R&D growth model with competitive suppliers of a final good and monopolistic suppliers of intermediate goods. Unlike existing studies with lump-sum taxes and fixed labor, we assume distortionary taxes and elastic labor, finding some new insights. First, subsidizing R&D investment is more effective than subsidizing final output or subsidizing the purchase of intermediate goods in terms of promoting growth. Second, in terms of raising welfare, the R&D subsidy may also be more effective than the other subsidies and all of them are dominated by their mix, but none can achieve the social optimum.©2006 Elsevier B.V. All rights reserved.
Source Title: Journal of Economic Dynamics and Control
ISSN: 01651889
DOI: 10.1016/j.jedc.2006.01.006
Appears in Collections:Staff Publications

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