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Gilad Sorek and Bharat Diwakar
''Weak Scale Effects in Overlapping Generations Economy''
( 2017, Vol. 37 No.2 )
We show how the two alternative saving motives - life-cycle consumption smoothing and parental bequests - determine the relation between population growth and R&D-based economic growth, i.e. the sign of the weak scale effect. We take a textbook R&D-based growth model of in…finitely lived agents with no life-cycle saving motive and re-analyze it in the Overlapping Generations (OLG) framework, which incorporates both life-cycle and bequest saving motives. We decompose the effect of each saving motive on the sign of the weak scale effect and show that in the presence of both saving motives it is ambiguous in general.
Keywords: R&D-based Growth, Weak Scale-Effects, Bequests, OLG
JEL: O3 - Technological Change; Research and Development: General
O4 - Economic Growth and Aggregate Productivity: General
Manuscript Received : Jan 13 2017 Manuscript Accepted : May 04 2017

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