CGE analysis of R&D investment policy considering trade-offs between economic growth and stability. (26th February 2021)

• Record Type: Journal Article
• Authors: Hwang, Won-Sik; Yeo, Yeongjun; Oh, Inha; Hong, Chanyoung; Jung, Sungmoon; Yang, Heewon; Lee, Jeong-Dong
• Is Part Of: Science and public policy. Volume 48:Number 3(2021)
• Page Start: 295
• Page End: 308
• Publication Date: 2021-02-26
• Subjects: R&D investment -- industrial growth -- economic stability -- computable general equilibrium; Science and state -- Periodicals; 338.926
• DOI: 10.1093/scipol/scaa068
• Languages: English
• ISSNs: 0302-3427

Abstract

Abstract: This study analysed economic growth and industrial structure under different conditions on research and development (R&D) investment. To simulate counterfactual scenarios, we built a recursive dynamic computable general equilibrium model named as Technology and Economy Modelling for Innovation Policy assessment (TEMIP) that focuses on private and public R&D investments and their net effects from a macroeconomic perspective. The simulation shows gross domestic product increases rapidly in South Korea when a given amount of expenditure is spent on public R&D activities rather than private R&D. Moreover, our simulation results imply that resource allocation for R&D investments should be elaborated through considering whether the ultimate policy goal is oriented towards economic growth or stability.