A Schumpeterian Growth Model with Heterogenous Firms

A common assumption in the Schumpeterian growth literature is that the innovation size is constant and identical across industries. This is in contrast with the empirical evidence which shows that: (i) the innovation size is far from being identical across industries; and (ii) the size distribution of profit returns from innovation is highly skewed toward the low value side, with a long tail on the high value side. In the present paper, we develop a Schumpeterian growth model that is consistent with this evidence. In particular, we assume that when a firm innovates, the size of its quality improvement is the result of a random draw from a Pareto distribution. This enables us to extend the class of quality-ladder growth models to encompass firm heterogeneity. We study the policy implications of this new set-up numerically and find that it is optimal to heavily subsidize R&D for plausible parameter values. Although it is optimal to tax R&D for some parameter values, this case only occurs when the steady-state rate of economic growth is very low.Schumpeterian Growth, R&D, optimal policy

Schumpeterian economic dynamics as a quantifiable minimum model of evolution

We propose a simple quantitative model of Schumpeterian economic dynamics. New goods and services are endogenously produced through combinations of existing goods. As soon as new goods enter the market they may compete against already existing goods, in other words new products can have destructive effects on existing goods. As a result of this competition mechanism existing goods may be driven out from the market - often causing cascades of secondary defects (Schumpeterian gales of destruction). The model leads to a generic dynamics characterized by phases of relative economic stability followed by phases of massive restructuring of markets - which could be interpreted as Schumpeterian business `cycles'. Model timeseries of product diversity and productivity reproduce several stylized facts of economics timeseries on long timescales such as GDP or business failures, including non-Gaussian fat tailed distributions, volatility clustering etc. The model is phrased in an open, non-equilibrium setup which can be understood as a self organized critical system. Its diversity dynamics can be understood by the time-varying topology of the active production networks.Comment: 21 pages, 11 figure

Long-run relationship between R&D investment and environmental sustainability:Evidence from the European Union member countries

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.The researchers, environmental scientists and policymakers around the world are exerting substantial efforts to mitigate the growth of CO2 emissions to save the planet. A number of measures and initiatives, such as, energy efficiency, renewable energy technologies and emission-control are proposed in order to reduce CO2 emissions. This study examines the long-run relationship between R&D investment and environmental sustainability in a panel of 25 European Union (EU) member countries over a period of seventeen years (1998 to 2014). We use robust and reliable econometric methods to capture the interactions between R&D investment on renewable energy consumption and CO2 emissions. The findings confirm that the growth of R&D expenditures promotes renewable energy consumption and plays a significant role in reducing CO2 emissions in the sample countries. Furthermore, the findings suggest that increasing the share of renewable energy consumption in the total energy mix also reduces CO2 emissions. Given these results, we suggest that the EU policymakers provide more financial and regulatory assistance to the R&D activities, specifically in the energy sector, to ensure promoting low carbon economies in this region

Minimum Wages, Import Status, and Firms' Innovation: Theory and Evidence from China

This study explores the heterogeneous effects of minimum wage on innovation of different types of firms. We develop an open‐economy R&D‐based growth model and obtain the following result: raising the minimum wage reduces innovation of firms that use domestic inputs but increases innovation of firms that import foreign inputs. We test this result using city‐level data on minimum wages and firm‐level patent data in China. In accordance with our theory, we find that raising the minimum wage is associated with more innovation by importing firms and less by non‐importing firms. This result survives a battery of robustness checks. (JEL E24, F43, O31

Facial expressions depicting compassionate and critical emotions: the development and validation of a new emotional face stimulus set

Attachment with altruistic others requires the ability to appropriately process affiliative and kind facial cues. Yet there is no stimulus set available to investigate such processes. Here, we developed a stimulus set depicting compassionate and critical facial expressions, and validated its effectiveness using well-established visual-probe methodology. In Study 1, 62 participants rated photographs of actors displaying compassionate/kind and critical faces on strength of emotion type. This produced a new stimulus set based on N = 31 actors, whose facial expressions were reliably distinguished as compassionate, critical and neutral. In Study 2, 70 participants completed a visual-probe task measuring attentional orientation to critical and compassionate/kind faces. This revealed that participants lower in self-criticism demonstrated enhanced attention to compassionate/kind faces whereas those higher in self-criticism showed no bias. To sum, the new stimulus set produced interpretable findings using visual-probe methodology and is the first to include higher order, complex positive affect displays

Variability in Laboratory vs. Field Testing of Peak Power, Torque, and Time of Peak Power Production Among Elite Bicycle Motocross Cyclists

The aim of this study was to ascertain the variation in elite male bicycle motocross (BMX) cyclists' peak power, torque, and time of power production during laboratory and field-based testing. Eight elite male BMX riders volunteered for the study, and each rider completed 3 maximal sprints using both a Schoberer Rad Messtechnik (SRM) ergometer in the laboratory and a portable SRM power meter on an Olympic standard indoor BMX track. The results revealed a significantly higher peak power (p <= 0.001, 34 ± 9%) and reduced time of power production (p <= 0.001, 105 ± 24%) in the field tests when compared with laboratory-derived values. Torque was also reported to be lower in the laboratory tests but not to an accepted level of significance (p = 0.182, 6 ± 8%). These results suggest that field-based testing may be a more effective and accurate measure of a BMX rider's peak power, torque, and time of power production

Dispositional optimism as a correlate of decision-making styles in adolescence

Despite the numerous psychological areas in which optimism has been studied, including career planning, only a small amount of research has been done to investigate the relationship between optimism and decision-making styles. Consequently, we have investigated the role of dispositional optimism as a correlate of different decision-making styles, in particular, positive for effective styles and negative for ineffective ones (doubtfulness, procrastination, and delegation). Data were gathered through questionnaires administered to 803 Italian adolescents in their last 2 years of high schools with different fields of study, each at the beginning stages of planning for their professional future. A paper questionnaire was completed containing measures of dispositional optimism and career-related decision styles, during a vocational guidance intervention conducted at school. Data were analyzed using stepwise multiple regression. Results supported the proposed model by showing optimism to be a strong correlate of decision-making styles, thereby offering important intervention guidelines aimed at modifying unrealistically negative expectations regarding their future and helping students learn adaptive decision-making skills

Facts and distortions in an endogenous growth model with physical capital, human capital and varieties

This article studies a model with physical and human capital accumulation and varieties. The model includes several distortions: duplication effects, spillovers, creative destruction, surplus appropriability, and an erosion effect. We show that the duplication effect in R&D is essential to make the model replicate several stylized facts linked with R&D. We evaluate the distance to the optimal solution, comparing the strength of each distortion.info:eu-repo/semantics/publishedVersio