Social and Behavioral Sciences Commons^™

Can Policy Spur Technological Growth?, William Sargent

Honors Theses

The long-term slowdown in productivity growth for OECD countries, despite increased resources allocated to R&D, has once again raised the issue of limits of technological change. I explore the relationship between labor productivity growth and R&D intensity, using macro-level panel data from OECD countries. My empirical analysis essentially tests the semi-endogenous growth theory against the fully-endogenous Schumpeterian growth theory. The semi-endogenous framework assumes diminishing returns to R&D and requires positive population growth to generate long-run growth. The fully-endogenous framework assumes growing product variety and requires a constant share of R&D inputs in overall inputs in order to generate positive long-run …