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Abstract

In this paper, we take a new look at the effects of the subsidy policy and the government’s RandD activities in an RandD-based growth model. The government not only subsidizes the RandD cost of the firms but also engages in RandD activities and, in addition, levies a specific tax on the firms producing the final and the intermediate goods, respectively, in order to finance the expenditure. We find that in the economy there exist two balanced equilibrium growth paths. In an economy with a high growth path, the government’s subsidy policy and its RandD activities will crowd out the private RandD activities, and hence the fiscal policies are of no help to the economic growth. In other words, the intermediate goods firms play an important role in driving the economic growth. By contrast, in an economy with a low growth path, the government that directly engages in RandD activities plays an important role in economic growth. The fiscal policies of the government have a positive effect on the economic growth.



Item Type: MPRA Paper -

Original Title: Franchise Fee, Tax-Subsidy Policies and Economic Growth-

Language: English-

Keywords: Government’s RandD activities, Specific tax, Subsidy policy, Endogenous growth, RandD-

Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - GeneralO - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - GeneralL - Industrial Organization > L0 - General > L00 - General-





Autor: Wang, Vey

Fuente: https://mpra.ub.uni-muenchen.de/27745/







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