On the timing of innovation in stochastic Schumpeterian growth models
By: Gadi Barlevy.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10741; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10741.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Schumpeter, Joseph Alois, 1883-1950.; Technological innovations.; Economic development.
Description: "Recent work has revived the Schumpeterian hypothesis that recessions facilitate innovation and growth.  But a major source of productivity growth, research and development, is actually procyclical.  This paper argues that while it is optimal to concentrate growth-enhancing activities in downturns, dynamic spillovers inherent to the R&D process lead private agents to concentrate too much of their R&D activity in booms, precisely when its social cost is highest.  Thus, while previous literature has argued recessions promote growth and intertemporal substitution is a desirable consequence of fluctuations, in the case of R&D recessions discourage growth and intertemporal substitution proves to be a social liability"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.