Homework
Since it stimulates
engine of
steady
spending
is
The second
progress
is
appropriate
in
from
to
growth
.
"
extent
the
of
degree
appropriability
the
from
profits
development of
results.
research
the
and
which firms can
R & D and of
of the level of
of
R &D
to
of their R & D
the results
determinant
the
economic
refers
Appropriability
benefit
engage
for
-
growth required technological progress
Sustained
-
development the fundamental
in production per worker-R & D
technical
increase
essential
3
technological progress
new
will
be
technological
It firms cannot
products they will not
,
slow-Chapter
p
Fertility refers to how effectively
and
4
R&D
spending
translates
.
into
12 ,
270
new
ideas
products
If research is fertile
-
that
is , if
R &D
spending
leads
to
many
new
products then other things being equal firms will have strong incentives
R &D
to
R &D
;
spend
spending and by implication technological
will be
high The determinants of thefertility of research lie
progress
-
,
,
on
,
.
.
largely outside the realm
"
of economics
-
.
Chapter 12
,
p
.
26
Approbability
discovered
time"
R &D
-
increases : Patents
new
product. the
the
production
Chapter
spending
12
or
p
.
,
-
due to
increases
technological progress
of
use
the
firm that
a
to exclude
product
new
has
anyone
for
some
27
increases
-
Long-run output
more
give
right
a
from
else
-
,
as
appropriability
improved
enhanced R &D
spending drives
productivity growth
and
Fertility-unchanged
fertility
Appropriability &
R &D
cost of
spending
R &D
-
rises
more
innovations
Appropriability
limit
can
Because
as
unchanged
a
which motivates
Long-run output-rises
in
-
-
of the decrease
to allocate
companies
and
preductivity
benefits
potentially decreases
industry-academia
knowledge exchange fertility
R&D
due to increased
knowledge sharing
,
result
,
as
networking
which
collaboration
increases
research
effective
additional resources
spending resulting
,
decreased
and
declines :
in the
are
critical
collaboration
for innovation
productivity through
The
basic
fertility of research depends
(the search for general
research
the development of new
R & D spending
-
as
R& D
on
-
of these results to specific
Chapter 12 p
,
lower
and results) and
principles
application
products)"
declines
returns
expected
(the
development
research and
the successful interaction
on
fertility
.
between
applied
uses
,
and
269
and less
investments
appropriability
limit
Long-run output-declines due to slower technical progress and
lower
productivity growth : Sustained growth required technological
development.
Appropriation
"
-
defend their
generate
R &D
a
reduced
innovations
profit
spending
-
declines
because
companies will be
against copying reducing
,
because less
their
unable
to
capacity to
appropriability reduces the
predicted profitability of drug development resulting in less
in
pharmaceutical R &D
,
investment
- increases because other
companies and researches will be able to
Fertility
use
this data to
build
new
development
lang
-run
reduced
therapies
output-decreases
R &D
in
technologies
the
spending which may
,
,
furthering the industry's
pharmaceutical business due to
hinder the development of
new
Short-term effects
:
a
government
inves
reducing
deficit
demand
aggregate
f
·thiscanhinderlenemiegrowth enpossiblytriggerLease
Reducing the
·
or
spen
raisin
a
new
long-term effects
·
:
Lower deficits can result in lover
This
·
boosts
The
productivity and capital
economy
rates
may eventually
Short-term effects
·
·
accumulation
investment
private
·
interest rates
achieve
by promoting
higher long-term growth
:
A 1 % drop in the Labor force lowers overalloutput.
Research expenditures have a limited short-term impact
because
they do not yield results right away
Long-term effects
:
Investing in basic research raises the economy's technical Level(AN;
Increased productivity compensates Labor force losses
boosting
production efficiency
Technological advancement propels the economy toward long-term
-
·
,
·
growth