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CGE analysis of R&D investment policy considering trade-offs between economic growth and stability

Author

Listed:
  • Won-Sik Hwang
  • Yeongjun Yeo
  • Inha Oh
  • Chanyoung Hong
  • Sungmoon Jung
  • Heewon Yang
  • Jeong-Dong Lee

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.

Suggested Citation

  • Won-Sik Hwang & Yeongjun Yeo & Inha Oh & Chanyoung Hong & Sungmoon Jung & Heewon Yang & Jeong-Dong Lee, 2021. "CGE analysis of R&D investment policy considering trade-offs between economic growth and stability," Science and Public Policy, Oxford University Press, vol. 48(3), pages 295-308.
    • Handle: RePEc:oup:scippl:v:48:y:2021:i:3:p:295-308.
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    File URL: http://hdl.handle.net/10.1093/scipol/scaa068
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