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High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach

Author

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  • Ekholm, Karolina

    (Research Institute of Industrial Economics (IFN))

  • Torstensson, Johan

    (Lund University)

Abstract

We use a specific-factor model to examine the conditions under which policy-makers are able to increase aggregate production of high-tech goods by production or R&D-subsidies in the short and long run. The difficulties for the policy-makers in designing a subsidy scheme that succeeds in expanding aggregate high-tech production involve taking into account the trade-off between resources used in R&D and production of high-tech goods, the relative impact of different R&D activities on productivity, and the ease with which resources may be attracted from the non-high-tech sector of the economy to the various high-tech industries.

Suggested Citation

  • Ekholm, Karolina & Torstensson, Johan, 1996. "High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach," Working Paper Series 467, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0467
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    PRODUCTION; RESEARCH AND DEVELOPMENT; PRODUCTIVITY;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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