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Publication details

Research & development and growth: A Bayesian model averaging analysis

Journal Article

Horváth Roman

serial: Economic Modelling vol.28, 6 (2011), p. 2669-2673

action: Society for Non-linear Dynamics and Econometrics Annual Conferencen, (Washington DC, US, 16.03.2011-18.03.2011)

research: CEZ:AV0Z10750506

project(s): GA402/09/0965, GA ČR

keywords: Research and development, Growth, Bayesian model averaging

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abstract (eng):

We examine the effect of research and development (R&D) on long-term economic growth using the Bayesian model averaging (BMA) to deal rigorously with model uncertainty. Previous empirical studies, which applied BMA, investigated the effect of dozens of regressors on long-term growth, but they did not examine the effect of R&D due to data unavailability. We extend these studies by proposing to capture the investment in R&D by the number of Nobel prizes in science. Using our indicator, the estimates show that R&D exerts a positive effect on long-term growth. This result is robust to many different parameter and model prior structures as well as to alternative definitions of R&D indicator.


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Institute of Information Theory and Automation