Research Interests:
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My current research projects are centered around the role that R&D plays in driving productivity growth, and in particular whether aggregate fluctuations have a significant impact on the rate of growth in technology. Current work tries to establish the basic facts about the cyclical behaviour of research spending at various levels of aggregation and propose simple theoretical frameworks that account for these, while other projects in development investigate the implications of these facts for welfare calculations in general equilibrium models of business cycles.
Parallel to this line of research, I am also interested in general equilibrium welfare analysis of different institutional frameworks for intellectual property rights, both in terms of short and medium term fluctuations as well as their long run properties. |
Working papers:
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Does growth matter for cycles?
Abstract: The relatively successful consolidation of dynamic stochastic general equilibrium models as the preferred modelling strategy in macroeconomics has had, so far, largely abstracted from the problem of how productivity growth is generated and instead focused on refining its performance around a stationary steady-state. Incorporating endogenously determined productivity growth is likely to affect the internal propagation mechanism of a standard RBC model through a feedback between output and the growth rate and, if so, abstracting from that process may lead to the model underreporting output fluctuations both at higher and lower frequencies. I develop three alternative specifications for the innovation generating research sector and compared the performance of those models with a benchmark RBC model with exogenous growth. All alternative specifications fail to outperform the standard RBC model at higher frequencies and only modestly improve over lower frequencies, but do reasonably well at capturing the behaviour of R&D over the cycle at all frequencies. The opportunity cost hypothesis and the cyclical behaviour of research spending Abstract: Schumpeter's memorable aphorism of "creative destruction" has spawned numerous important contributions in the study of economic growth but there has been substantially less attention paid to his hypothesis that R&D expenditure should display counter-cyclical features. I outline a dynamic stochastic general equilibrium model in which research expenditure drives innovation and growth, and attempt to reconcile empirical results suggesting both pro-cyclicality of R&D and research expenditure smoothing with the response of those variables in the theoretical model. It is then extended to allow for an endogenous market structure so that the behaviour of research spending at three levels of aggregation can be analysed. The model generates a behaviour of R&D spending that is broadly consistent with empirical evidence regarding its pro-cyclicality and outlines the mechanisms through which that occurs. I then briefly discuss the effect of business cycle fluctuations on the time paths of aggregate productivity and aggregate output in each of the models analysed. |
Masters thesis: |
Title: A model of general equilibrium pricing of innovation with effort exerting consumers
Abstract: This paper reviews the theoretical literature on the subject of innovation and intellectual property rights, highlighting specic concerns that have been raised by authors at least since Schumpeter. I also propose an extension of the formulation envisioned by Boldrin & Levine and Quah where consumers are allowed some discretion in the effort levels they exert while accessing the innovative good. The main results imply that when consumers are not allowed to reap any benefits from the costly effort, i.e., there is excessive appropriability by the firm, the decentralised market outcome is not equivalent to the social optimum. I also discuss possible further extensions to this formulation and argue that even though the market outcome is not socially ecient, lack of appropriability by innovators need not be a concern in a competitive economy. |
Doctoral thesis: |
Title: Three essays on R&D, growth and cycles
Abstract: The aggregate behaviour of research expenditure has often been subject to fragmented and partial analyses embedded in wider questions in macroeconomic theory. I combine some of these approaches to create a unified framework under which the relationship between business cycles, economic growth and R\&D expenditure can be analysed. In particular, I argue that while the inclusion endogenous technological progress in a classical dynamic general equilibrium model does not greatly improve its performance, it captures important features of the behaviour of research spending along the cycle. Then, using multiple data sources and levels of aggregation, I argue that existing theories of the cyclical pattern of investment in innovative activity are incomplete and propose a more general framework that ties together previous results in the literature. Finally, I develop a theoretical model that captures many of these features and makes additional predictions about the behaviour of research expenditure along the business cycle that can then be explicitly and formally tested. |