Macro-economic consequences of European research policy: Prospects of the Nemesis model in the year 2030

Acknowledging the weakness of R&D expenditure in Europe relative to that in the United States and Japan, Barcelona's European Council agreed in March 2002 to increase investment in R&D to 3% of GDP by 2010. The aim of this paper is to assess the macro-economic consequences of such a pol...

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Bibliographic Details
Published in:Research policy 2006-09, Vol.35 (7), p.910-924
Main Authors: Brécard, Dorothée, Fougeyrollas, Arnaud, Le Mouël, Pierre, Lemiale, Lionel, Zagamé, Paul
Format: Article
Language:English
Subjects:
Econometrics
Economic trends
Endogenous technical change
European macro-econometric model
Innovation policy
Innovations
Macroeconomics
Quantitative Finance
R&D
Research & development expenditures
Studies
Technological change
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Summary:Acknowledging the weakness of R&D expenditure in Europe relative to that in the United States and Japan, Barcelona's European Council agreed in March 2002 to increase investment in R&D to 3% of GDP by 2010. The aim of this paper is to assess the macro-economic consequences of such a policy, using the European macro-econometric model Nemesis. Results show that macro-economic trends can be split into two distinct phases. In the first one, growth is directly driven by R&D expenditures, while in the second phase, innovation is the engine of growth through productivity and competitiveness gains.
ISSN:0048-7333
1873-7625
DOI:10.1016/j.respol.2006.03.001