Informing
Policy
for Progress

A Computational Analysis of R&D Support Programs

Government R&D support programs are examined within a dynamic equilibrium model of imperfectly competitive industries in order to study the effectiveness of such programs and the extent to which their design matters.  We compare two common support schemes, R&D tax credit and direct R&D grants.   Adopting comprehensive welfare measures that take into account government, producer […]

Quantitative Growth Effects of Subsidies in a Search Theoretic R&D Modal, Science, Technology and the Economy Program (STE) – Working Papers Series STE-WP-16-2002

Should government subsidize R&D and does it matter how these subsidies are allocated? We examine these questions in a dynamic model where R&D is described as sequential sampling from a distribution of new ideas. Successful discoveries affect future available resources and incentives for further R&D. Consequently, there may be under-investment in R&D. We study the […]