Financial Development, Economic Growth and R&D Cyclical Movement

Ka Wai Fung, Chi Keung Lau

    Research output: Contribution to journalArticlepeer-review


    This paper builds up an endogenous growth model à la Aghion and Howitt (1992) and Boucekkine et al (2005). We assume that R&D firms use only investment good as input, instead of final good as hypothesized in the above two models. We show that investment price will be a negative function of aggregate quality index; and thus decline over time. In this model, subsidy on R&D has growth-enhancing effect. Moreover, this model predicts unambiguously that R&D is procyclical.
    Original languageEnglish
    Pages (from-to)133-145
    JournalJournal of Applied Economics and Business Research
    Issue number3
    Publication statusPublished - Nov 2013


    Dive into the research topics of 'Financial Development, Economic Growth and R&D Cyclical Movement'. Together they form a unique fingerprint.

    Cite this