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Agricultural R&D, policies, (in)determinacy, and growth

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  • Lai, Chung-Hui
  • Hu, Shih-Wen
  • Wang, Vey
  • Chao, Chi-Chur

Abstract

This paper examines the effects of agricultural subsidy policies on long-run growth. The novelty of this paper lies in its investigation of how the long-run effects of a land productivity conservation subsidy and an agricultural R&D subsidy are affected by the possible emergence of the indeterminacy of equilibria in Rivera-Batiz and Romer's endogenous growth model with elastic labor. The analysis shows that if the technology growth rate is more sensitive to a change in the land productivity conservation subsidy policy than the consumption growth rate, the policy will generally enhance (harm) long-run growth when the balanced growth path is indeterminate (determinate). Furthermore, the agricultural R&D subsidy will enhance (harm) economic growth when the balanced growth path is determinate (indeterminate).

Suggested Citation

  • Lai, Chung-Hui & Hu, Shih-Wen & Wang, Vey & Chao, Chi-Chur, 2017. "Agricultural R&D, policies, (in)determinacy, and growth," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 328-341.
    • Handle: RePEc:eee:reveco:v:51:y:2017:i:c:p:328-341
    DOI: 10.1016/j.iref.2017.06.005
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    References listed on IDEAS

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    Cited by:

    1. Eigner, Amanda E. & Nuppenau, Ernst-August, 2019. "Applied spatial approach of modelling field size changes based on a consideration of farm and landscape interrelations," Agricultural Systems, Elsevier, vol. 176(C).

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    More about this item

    Keywords

    Land productivity conservation; Subsidy; Agricultural R&D; Endogenous growth;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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