Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66022
Year of Publication: 
2010
Series/Report no.: 
Diskussionsbeitrag No. 453
Publisher: 
Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät, Hannover
Abstract: 
Previous research on optimal R& D subsidies has focussed on the long run. This paper characterizes the optimal time path of R& D subsidization in a semi- endogenous growth model, by exploiting a recently developed numerical method. Starting from the steady state under current R& D subsidization in the US, the R& D subsidy should significantly jump upwards and then slightly decrease over time. There is a negligible loss in welfare, however, from immediately setting the R& D subsidy to its optimal long run level, compared to the case where the dynamically optimal policy is implemented.
Subjects: 
R&D subsidy
Transitional dynamics
Semi-endogenous growth
Welfare
JEL: 
H20
O30
O40
Document Type: 
Working Paper

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