9510916 Jones The emergence of the R&D-based endogenous growth literature has led to an overlap between the macro growth literature and a micro literature on the economics of research and development. Papers in each of these literature's have documented a number of distortions in the allocation of resources to R&D that may arise, often focusing on one or two of these distortions for illustrative purposes. The contribution of this CAREER project is to incorporate several of these distortions into a single general equilibrium model and to analyze their effects empirically. The project provides a coherent framework for thinking about these distortions and estimating their net impact on R&D. It will focus on four key distortions in the allocation of resources to R&D: a monopoly markup effect, a knowledge spillover effort ("standing on shoulders"), a creative destruction effect, and a patent race effect ("stepping on toes"). The Education Plan consists of the development of an undergraduate research seminar for exploring the broad implications of the R&D-based growth model. The seminar will be used to provide qualitative evidence to complement the formal statistical analysis in the Research Plan. The initial part of the research seminar will highlight the lessons of old and new growth theory. After discussing the subtleties associated with testing the R&D based models, the investigator will explore the historical analysis of technology and growth and the qualitative literature on population and economic growth.
