On the global supply of basic research


Gersbach, H. and Schneider, M. T., 2015. On the global supply of basic research. Journal of Monetary Economics, 75, pp. 123-137.

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    In a two-country Schumpeterian growth model, we study the incentives for basic research investments by governments in a globalized world. A country’s basic research investments increase with the country’s level of human capital and decline with its own market size. This may explain why some smaller countries invest so much in basic research. Compared with the optimal investments achievable when countries coordinate their basic research policies, a single country may over-invest in basic research. However, the total amount of decentralized basic research investments is always below the socially optimal investment level, which justifies policy coordination in this area.


    Item Type Articles
    CreatorsGersbach, H.and Schneider, M. T.
    Related URLs
    URLURL Type
    Uncontrolled Keywordsbasic research,public goods,economic growth,coordination of governments
    DepartmentsFaculty of Humanities & Social Sciences > Economics
    ID Code43282


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