Reexamining the interaction between innovation and capital accumulation

In endogenous growth models with innovation and capital accumulation Arnold [J. Macroeconomics 20 (1998) 189] and Blackburn et al. [J. Macroeconomics 22 (2000) 81] show that long-run growth of per capita income is independent of innovation activities; it is solely determined by preferences and the h...

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Bibliographic Details
Published in:Journal of macroeconomics 2003-12, Vol.25 (4), p.541-560
Main Author: Zeng, Jinli
Format: Article
Language:English
Subjects:
Capital
Capital accumulation
Economic growth
Economic policy
Evaluation
Government policy
Growth models
Human capital
Innovation
Innovations
Long-run growth
Macroeconomics
Policy analysis
Policy effects
Studies
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Summary:In endogenous growth models with innovation and capital accumulation Arnold [J. Macroeconomics 20 (1998) 189] and Blackburn et al. [J. Macroeconomics 22 (2000) 81] show that long-run growth of per capita income is independent of innovation activities; it is solely determined by preferences and the human capital accumulation technology. As a result, government policies do not affect long-run growth. This paper develops an endogenous growth model with innovation and (physical and human) capital accumulation to show that long-run growth depends on both innovation and capital accumulation technologies as well as on preferences and that government taxes and subsidies can have effects on the long-run growth rate.
ISSN:0164-0704
1873-152X
DOI:10.1016/j.jmacro.2002.06.001