Bloom, Nick (2007) Uncertainty and the dynamics of R&D. CEPDP, 792. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 9780853281689
|
PDF
Download (1147Kb) | Preview |
Abstract
Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions - a “caution-effect” - making it more persistent over time. Thus, uncertainty will play a critical role in shaping the dynamics of R&D through the business cycle, and its response to technology policy. I also show that if firms are increasing their level of R&D then the effect of uncertainty will be negative, while if firms are reducing R&D then the effect of uncertainty will be positive.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://cep.lse.ac.uk |
| Additional Information: | © 2007 Nick Bloom |
| Uncontrolled Keywords: | R&D, uncertainty, real options |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory |
| Journal of Economic Literature Classification System: | D - Microeconomics > D8 - Information, Knowledge, and Uncertainty O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development D - Microeconomics > D9 - Intertemporal Choice and Growth > D92 - Intertemporal Firm Choice and Growth, Investment, or Financing |
| Sets: | Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| Identification Number: | 792 |
| URL: | http://eprints.lse.ac.uk/19724/ |
Actions (login required)
 |
Record administration - authorised staff only |
