Entrepreneurial Innovation and Sustained Long-run Growth without Weak or Strong Scale Effects

R&D-based growth theory suggests that a larger population size raises either the long-run rate of economic growth (“strong scale effect”) or the level of per capita income (“weak scale effect”), with far-reaching policy implications. However, for modern times there is little empirical support for strong scale effects and evidence in favor of weak scale effects is mixed, at best. This paper develops a simple overlapping-generations framework with endogenous occupational choice of heterogeneous agents and entrepreneurial innovations in which any form of scale effect is absent. A higher population growth rate has a negligible, possibly negative effect on the long-run growth rate of per capita income. Long-run growth is sustained also in absence of population growth and generally is policy-dependent.economic growth, endogenous technical change, entrepreneurial skills, population growth, scale effects

Contest for Attention in a Quality-Ladder Model of Endogenous Growth

This paper develops a quality-ladder model of endogenous growth to study the interplay between in-house R&D and marketing expenditure. Although promotional activity is modelled as purely wasteful competition among firms for attention, it unambiguously fosters innovation activity of firms, and possibly, leads to faster growth. This result rests on two premises which are consistent with empirical evidence. First, if firms incur higher sunk costs for marketing, concentration and firm sizes rise. Second, firm size and R&D expenditure are positively related. As a result, R&D investments per firm may even become excessive, whereas being inefficiently low in the benchmark case without marketing. This has non-trivial consequences for the socially optimal policy design with respect to R&D subsidies and entry incentives.contest for attention, endogenous growth, innovation activity, marketing, R&D subsidies, scale effects

How to Promote R&D-based Growth? Public Education Expenditure on Scientists and Engineers versus R&D Subsidies

Empirical evidence suggests that positive externalities from R&D exceed negative ones. According to conventional wisdom, this calls for R&D subsidies. This paper develops a quality-ladder growth model with overlapping generations which evaluates the positive and normative implications of R&D subsidies and compares them with the effects of public education policy to promote R&D. Unlike standard growth models, the proposed framework accounts for the specificity of science and engineering (S&E) skills, where individuals endogenously choose the type of education, and allows for heterogeneity in individual ability. Although intertemporal knowledge spillovers are hypothesized and negative R&D externalities are absent, the analysis shows somewhat surprisingly that R&D subsidies may be detrimental to both productivity growth and welfare, in contrast to publicly provided education targeted to S&E skills. Finally, the optimal structure of public education spending on different skills is examined.education policy, endogenous growth, R&D subsidies, scientists and engineers, skill specificity

Risky Human Capital Investment, Income Distribution, and Macroeconomic Dynamics

This paper demonstrates that the role of the personal income distribution for an economy's process of development through risky human capital accumulation critically depends on the shape of the saving function. Empirical evidence for the U.S. strongly suggests that the marginal propensity to save is increasing in income, a property which so far has not been allowed for in the literature on human capital, income distribution and macroeconomics. Doing so, the present analysis suggests that the impact of higher inequality on the aggregate human capital stock, and thus, on growth is positive under rather weak conditions. Results heavily rely on a positive impact of parents. income on children's human capital investments, which holds under standard assumptions on labor income risk and risk aversion in the model, and is largely supported by empirical evidence.Growth, Income Distribution, Intergenerational Transfers, Risky Education, Saving Function.

Income Inequality, Voting Over the Size of Public Consumption, and Growth

According to a standard argument, higher income inequality fosters redistributive activities of the government in favor of the median income earner. This paper shows that if redistribution is achieved by a public provision of goods and services rather than by transfers, higher income inequality may imply a smaller size of the government in majority voting equilibrium. In addition to a static voting model, an endogenous growth model is analyzed to examine the role of saving decisions of heterogeneous individuals for both the distributional incidence of proportional factor income taxes and the voting outcome.income distribution, public consumption, majority voting, investment-driven growth

Maxwell's Demon at work: Two types of Bose condensate fluctuations in power-law traps

After discussing the key idea underlying the Maxwell's Demon ensemble, we employ this idea for calculating fluctuations of ideal Bose gas condensates in traps with power-law single-particle energy spectra. Two essentially different cases have to be distinguished. If the heat capacity remains continuous at the condensation point in the large-N-limit, the fluctuations of the number of condensate particles vanish linearly with temperature, independent of the trap characteristics. If the heat capacity becomes discontinuous, the fluctuations vanish algebraically with temperature, with an exponent determined by the trap. Our results are based on an integral representation that yields the solution to both the canonical and the microcanonical fluctuation problem in a singularly transparent manner.Comment: 10 pages LaTeX and 3 eps-figures, published versio

Some generic properties of level spacing distributions of 2D real random matrices

We study the level spacing distribution $P(S)$ of 2D real random matrices both symmetric as well as general, non-symmetric. In the general case we restrict ourselves to Gaussian distributed matrix elements, but different widths of the various matrix elements are admitted. The following results are obtained: An explicit exact formula for $P(S)$ is derived and its behaviour close to S=0 is studied analytically, showing that there is linear level repulsion, unless there are additional constraints for the probability distribution of the matrix elements. The constraint of having only positive or only negative but otherwise arbitrary non-diagonal elements leads to quadratic level repulsion with logarithmic corrections. These findings detail and extend our previous results already published in a preceding paper. For the {\em symmetric} real 2D matrices also other, non-Gaussian statistical distributions are considered. In this case we show for arbitrary statistical distribution of the diagonal and non-diagonal elements that the level repulsion exponent $\rho$ is always $\rho = 1$, provided the distribution function of the matrix elements is regular at zero value. If the distribution function of the matrix elements is a singular (but still integrable) power law near zero value of $S$, the level spacing distribution $P(S)$ is a fractional exponent pawer law at small $S$. The tail of $P(S)$ depends on further details of the matrix element statistics. We explicitly work out four cases: the constant (box) distribution, the Cauchy-Lorentz distribution, the exponential distribution and, as an example for a singular distribution, the power law distribution for $P(S)$ near zero value times an exponential tail.Comment: 21 pages, no figures, submitted to Zeitschrift fuer Naturforschung

Optimization of electron pumping by harmonic mixing

For a symmetric bridge coupled to infinite leads, in the presence of a dipole-coupled external ac-field with harmonic mixing, we solve the Schr\"odinger equation in the time-domain using open boundary conditions as well as in the energy-domain using Floquet scattering theory. As this potential breaks parity and generalized parity, we find a non-vanishing average current. We then optimize the relative amplitude ratio between the fundamental and the second harmonic leading to a maximum in the pump current.Comment: 13 pages, 6 figures, accepted at Phys. Rev. B, http://prb.aps.org/accepted/B/7b073O7dMc412f17647d3877ee3ac5c3e271dcb1