R&D POLICY IN THE ECONOMY WITH STRUCTURAL CHANGE AND HETEROGENEOUS SPILLOVERS

Abstract

This paper develops an endogenous growth model with doubly differentiated R&D being the growth engine. The model incorporates dynamic structural change and heterogeneous knowledge spillovers. As a result, decentralized economy may exhibit non-monotonic growth paths and declining R&D productivity. Conditions on the knowledge spillover operator granting the existence of balanced growth for first-best and market economies are obtained. Different regulation tools helpful in achieving the sustainable path and their limits are studied.

Structural changes in economy of the regions in the context of digitalization

“…The document (BONDAREV, 2021) develops an endogenous growth model in which doubly differentiated research and development is the engine of growth. The authors note that the model includes dynamic structural changes and heterogeneous changes in knowledge.…”