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Articles

No. 22 (2009)

Government as a Promoter of Technological Change: A Learning-Based Growth Model.

  • Francisco Venegas-Martínez
  • Salvador Rivas Aceves
DOI:
https://doi.org/10.29201/nseay880
Published
June 26, 2009

Abstract

This paper is aimed at developing an endogenous growth model in which the gevernment acts as a promoter of technology generation through its spending. The macroeconomic equilibrium that is consistent with the learning process of the agents´ preferences is characterized and the level of government spending, intended to generate new technologies, that maximizes the economic welfare of the agents when they are subject to such learning process is established. One of the major findings of this research is that there is a positive impact on economic growth when the goverment acts as a promoter of thechological change. Moreover, the impacts on economic welfare from changes in spending, taxes, and prices are assessed. Finally, there is a calibration of the model in which the level of goverment spending that generates a change in technological conditions is determined.

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