QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS
The subject matter of research is the examination of the optimal public policy in an R&D-based endogenous growth model with monopolistic supply of intermediate goods. The goal of the work is to study whether an adequate government intervention can provide the required incentives to correct marke...
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| Format: | Article |
| Language: | English |
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Kharkiv National University of Radio Electronics
2019-09-01
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| Series: | Сучасний стан наукових досліджень та технологій в промисловості |
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| Online Access: | https://itssi-journal.com/index.php/ittsi/article/view/141 |
| _version_ | 1818351312747626496 |
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| author | Ahmed Bellakhdhar |
| author_facet | Ahmed Bellakhdhar |
| author_sort | Ahmed Bellakhdhar |
| collection | DOAJ |
| description | The subject matter of research is the examination of the optimal public policy in an R&D-based endogenous growth model with monopolistic supply of intermediate goods. The goal of the work is to study whether an adequate government intervention can provide the required incentives to correct market inefficiencies and make the decentralized economy to replicate the optimal solutions attainable by a social planner. The article solves the following tasks: finding the model economy’s decentralized equilibrium and social optimal solution, comparison of the welfare effects of different fiscal variables, consideration of the different market distortions and the choice of the appropriate policy variables that allow the decentralized economy to achieve sustainable optimal growth. Methods of mathematical formulation, theoretical analysis and economic interpretations have been used. The following results were obtained: the first-best optimum can be decentralized by means of a tax on capital income at a constant rate combined with equality between the share of public spending in the total expenditure on education and the tax on labor income and a time-varying subsidy to R&D. Conclusions. Investments in knowledge-capital are the principal determinants of economic development. Our model incorporates three sources of inefficiency: monopolistic competition in the intermediate-goods sector, duplication externalities and spillovers in R&D. To correct these imperfections and achieve sustainable optimal growth, the intervention of the state by an effective fiscal policy is necessary. |
| first_indexed | 2024-12-13T18:35:45Z |
| format | Article |
| id | doaj.art-9dfc8005de104c94a0199650d5666ff1 |
| institution | Directory Open Access Journal |
| issn | 2522-9818 2524-2296 |
| language | English |
| last_indexed | 2024-12-13T18:35:45Z |
| publishDate | 2019-09-01 |
| publisher | Kharkiv National University of Radio Electronics |
| record_format | Article |
| series | Сучасний стан наукових досліджень та технологій в промисловості |
| spelling | doaj.art-9dfc8005de104c94a0199650d5666ff12022-12-21T23:35:21ZengKharkiv National University of Radio ElectronicsСучасний стан наукових досліджень та технологій в промисловості2522-98182524-22962019-09-013 (9)10.30837/2522-9818.2019.9.022QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSISAhmed Bellakhdhar0Higher Institute of Management of TunisThe subject matter of research is the examination of the optimal public policy in an R&D-based endogenous growth model with monopolistic supply of intermediate goods. The goal of the work is to study whether an adequate government intervention can provide the required incentives to correct market inefficiencies and make the decentralized economy to replicate the optimal solutions attainable by a social planner. The article solves the following tasks: finding the model economy’s decentralized equilibrium and social optimal solution, comparison of the welfare effects of different fiscal variables, consideration of the different market distortions and the choice of the appropriate policy variables that allow the decentralized economy to achieve sustainable optimal growth. Methods of mathematical formulation, theoretical analysis and economic interpretations have been used. The following results were obtained: the first-best optimum can be decentralized by means of a tax on capital income at a constant rate combined with equality between the share of public spending in the total expenditure on education and the tax on labor income and a time-varying subsidy to R&D. Conclusions. Investments in knowledge-capital are the principal determinants of economic development. Our model incorporates three sources of inefficiency: monopolistic competition in the intermediate-goods sector, duplication externalities and spillovers in R&D. To correct these imperfections and achieve sustainable optimal growth, the intervention of the state by an effective fiscal policy is necessary.https://itssi-journal.com/index.php/ittsi/article/view/141endogenous growthR&D intensitysocial plannermonopolistic distortionsoptimal policy |
| spellingShingle | Ahmed Bellakhdhar QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS Сучасний стан наукових досліджень та технологій в промисловості endogenous growth R&D intensity social planner monopolistic distortions optimal policy |
| title | QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS |
| title_full | QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS |
| title_fullStr | QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS |
| title_full_unstemmed | QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS |
| title_short | QUANTIFYING OPTIMAL POLICY IN AN ENDOGENOUS MODEL: A THEORETICAL ANALYSIS |
| title_sort | quantifying optimal policy in an endogenous model a theoretical analysis |
| topic | endogenous growth R&D intensity social planner monopolistic distortions optimal policy |
| url | https://itssi-journal.com/index.php/ittsi/article/view/141 |
| work_keys_str_mv | AT ahmedbellakhdhar quantifyingoptimalpolicyinanendogenousmodelatheoreticalanalysis |