Search

From the perspective of standard public good theory the total amount of greenhouse gas mitigation (or public good supply in general) will be lower in a leader-follower (Stackelberg) game than in a simultaneous Nash game so that strategic leadership is disadvantageous for climate policy. We show that this needs no longer be true when the leading country has the option to employ a technology by which it can reduce its abatement costs and thus improve the productivity of its contribution technology. Then both countries also are better off in the Stackelberg game than in the Nash game. Our general result is illustrated by an example with Cobb-Douglas preferences and, finally, an empirical application to global climate policy is briefly discussed. [ABSTRACT FROM AUTHOR]

Byline: Tarun Kabiraj (1), Soma Roy (1) Keywords: cooperative research; product quality; R&amp D output elasticity; D21; L13; O31 Abstract: We assume that R&amp D investment by a firm improves the quality of the product. This is reflected in an upward shift of the demand function. Firms can do R&amp D either independently or cooperatively. We show that cooperative research strictly dominates non-cooperative research, both in terms of profitability and welfare. Also, R&amp D investment by each firm under cooperative research is larger for a relatively high R&amp D output elasticity. The higher the degree of product differentiation and/or larger the R&amp D output elasticity is, the larger the increase in quality level under cooperative research, compared to non-cooperative research, will be. Author Affiliation: (1) Economic Research Unit, Indian Statistical Institute, 203 B.T. Road, Kolkata, 700108, India Article History: Registration Date: 01/01/2004 Received Date: 29/01/2002 Online Date: 06/07/2004

Byline: Richard Nahuis (1) Keywords: R&amp D spillovers; productivity growth; general purpose technology; skill premium; O31; O33; O41; J31; F43 Abstract: The 'computer revolution' took very long to pay off in productivity growth in the computer-using sectors. The relative wage of skilled workers, however, has risen sharply from the early days of the 'computer revolution' onward. As skilled workers' wages reflect their productivity, the two observations together pose a puzzle. This paper provides a micro-based explanation for the long diffusion period of the 'computer revolution'. The general equilibrium model of growth zooms in on the research process and provides an explanation for sluggish growth with booming relative wages of the skilled. Technological progress in firms is driven by research aimed at improving the production technology (innovation) and by assimilation of ideas or principles present outside the firm (learning). A new General Purpose Technology (GPT) like the 'computer revolution' generates an initial slowdown in economic growth and an increase in the skill premium. Author Affiliation: (1) CPB Netherlands Bureau for Economic Policy Analysis and Utrecht School of Economics, Van Stolkweg 14, 2508 GM, The Hague, The Netherlands Article History: Registration Date: 01/01/2004 Received Date: 28/10/2002 Online Date: 02/08/2004 Article note: Acknowledgement I am indebted to Theo van de Klundert for suggestions and encouragement. Suggestions by Jan Boone, Bas Jacobs, Patrick Francois, Henri de Groot, Lex Meijdam, Niek Nahuis Sjak Smulders, Harald Uhlig and anonymous referees have contributed to the paper.

The most fundamental proposition about growth and competition is that there is a tradeoff between static welfare and long-term growth. This paper reconsiders this basic proposition in an expanding variety endogenous growth model with competitive markets for “old” innovative products and for a traditional good. We shed light on some implications of monopolistic distortions which tend to be ignored by standard models. First, no growth may be better than some growth, since modest positive growth potentially requires sizeable static welfare losses. Second, the economy may converge to a steady state with zero growth, even though a locally saddle-point stable steady state with positive growth exists if the initial share of “cheap” competitive markets is sufficiently high, as this implies a relatively low demand for “expensive” innovative goods. Third, such a “no-growth trap” may happen in a world economy made up of several countries engaged in free trade with each other. The policy implications are that growth-enhancing policies may be misguided and that quick deregulation as well as quick trade liberalization can lead to stagnation in the long term. [ABSTRACT FROM AUTHOR]

We consider a market for vertically differentiated goods where firms enter over time, after having developed innovations characterised by different quality levels. We show that patent height and length interact to determine the ultimate emergence of duopoly. In general, imposing quality improvements on later entrants entails the persistence of monopoly, while a duopoly equilibrium emerges when the second innovator is allowed to produce a sufficiently inferior quality and the patent protection granted to the first innovator is not too long-lasting. [ABSTRACT FROM AUTHOR]

This note analyses the effect of the policy of tightening Intellectual Property Rights (IPR) on the rate of innovation in the North and on the welfare in both North and South in a model which is otherwise identical to Helpman (1993) except in the concept of knowledge capital. We assume that the South based imitated products do not contribute to the knowledge capital in the North. It is shown that the tightening of IPR raises the rate of innovation in the North and may improve the welfare of both North and South. These results are significantly different from those in Helpman (1993). [ABSTRACT FROM AUTHOR]

We assume that R&D investment by a firm improves the quality of the product. This is reflected in an upward shift of the demand function. Firms can do R&D either independently or cooperatively. We show that cooperative research strictly dominates non-cooperative research, both in terms of profitability and welfare. Also, R&D investment by each firm under cooperative research is larger for a relatively high R&D output elasticity. The higher the degree of product differentiation and/or larger the R&D output elasticity is, the larger the increase in quality level under cooperative research, compared to non-cooperative research, will be. [ABSTRACT FROM AUTHOR]

This paper presents a general-equilibrium model of endogenous skilled-biased technological change and matching unemployment in a disaggregated economy. We simultaneously endogenize both the direction and the pace of technological change as well as the long-run unemployment rates. We show that an increase in the supply of high-skilled labor can induce skilled-biased technological change, a reduction in high-skilled unemployment and a rise in the wage differential between high- and low-skilled workers. In accordance with convincing empirical evidence, the high-skilled suffer from shorter and fewer spells of unemployment. [ABSTRACT FROM AUTHOR]