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Waelde, Klaus
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 920
Current explanations why a growing economy necessarily goes through booms and recessions predict countercyclical R&D investment. As this is very controversial from an empirical perspective, a stochastic Poisson model of endogenous business cycles and growth is presented where the determinants of the cyclical behaviour of R&D investment are analytically studied. Providing an explicit expression for the expected length of a cycle shows that high frequency fluctuations can indeed be understood by this approach. It is also shown how small technological improvements translate into large aggregate fluctuations.
endogenous fluctuations and growth
uncertainty under continuous time
Document Type: 
Working Paper

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