Tiago Neves Sequeira 

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Endogenous Growth Theory

Contributions to the Endogenous Growth Theory

Include studies about the theoretical process of knowledge production (both embodied and disembodied knowledge or human capital and technology respectively) and about the effect of natural resources and social capital on economic growth, including the interactions among the different factors of production. The changes proposed to the theory of endogenous growth are tested by calibration and simulation exercises and against historical evidence or cross-country analysis. Additionally we discovered and quantified various distortions in the market that have important policy implications concerning the subsidization of R&D, human and social capital and the taxation of polluting activities. The equilibria and transitional properties of the theoretical economies are deeply analysed.

Among the main contributions, there are the following:

  • the influence of technological progress (disembodied knowledge) on the accumulation of human capital (embodied knowledge) is an important cost of technological progress to be taken into account and can possibly lead to excessive subsidization to R&D activities;
  • the influence of technological progress on the accumulation of human capital (embodied knowledge) may have important influence in the evolution of the composition of human capital (high-tech versus low-tech) around the globe and through recent decades;
  • taking different and realistic imperfections in different markets into account and a positive effect technological progress may have in decreasing pollution, it is reasonable to conclude that the developed countries may benefit from increasing subsidization to R&D, even if this policy is neutral to government deficits;
  • the explanation of the take-off could have been dependent on initial endowments of technology and human or physical capital;
  • FDI can be a substitute of R&D subsidization in small open economies;
  •  Entropy can describe a complexity effect that suggests that part of modern innovations have a stabilizing role in complexity, contributing to explain the productivity slowdown of the last part of the XXth century and suggesting that this slowdown can be a long-lasting process; 
  • the analysis of long-run transitional dynamics is very important to determine the level of welfare of a given country nowadays and the effect of policies on the level of welfare.

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Work in Progress

Demography, Growth and Inequality