Bharat D

• Diwakar, B., Sorek, G., 2016, "Human‐Capital Spillover, Population, and R&D-based Growth". The B.E. Journal of Macroeconomics (Contributions), Vol 17(1). 

 

We study a two-sector R&D model with endogenous human capital accumulation. Allowing for fractional human capital spillover from parents to their offspring, which are subject to congestion in fertility rate, we establish non-monotonic relations between population growth and economic growth. These non-monotonic relations, which are polynomial in general, are determined by the base level of human capital spillover and the magnitude of the congestion effect: a U-shape relation can arise under low congestion factor, whereas a hump shape may present for high congestion factor. Hence this work contributes to the recent line of modified R&D-based growth models, aimed to align theory with the mixed empirical data on the relationship between population growth and economic prosperity.  [Paper]

 

• Diwakar, B., Sorek, G., 2016, "Dynastic Altruism, Population Growth, and R&D-Based Growth". Economics Bulletin, Vol 36(4), p 2003-2009. 

 

We show that nonlinear dynastic altruism toward future generations yields a non-monotonic relation between population growth and economic prosperity, which is polynomial in general. The exact shape of this non-monotonic relation depends on the concavity of parental altruistic utility. Hence, this work contributes to a recent line of modified R&D-based growth models aimed at aligning theory with empirical evidence on the non-linear relation between population growth and economic prosperity.  [Paper]

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• Diwakar, B., Sorek, G., 2017, "Weak Scale Effects in Overlapping Generations Economy". Economics Bulletin, Vol 37(2), p 962-969.

 

We show how the two alternative saving motives - life-cycle consumption smoothing and parental bequests - determine the relationship 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 infinitely lived agents with no life-cycle saving motive and reanalyze 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. [Paper]

 

• ​​Diwakar, B., Sorek, G., Stern, M., 2018, "Patents and Growth in OLG economy with Physical Capital".  Macroeconomic Dynamics.

 

We study the implications of patents in an overlapping generations model with a horizontal innovation of differentiated physical capital. We show that within this demographic structure of finitely lived agents, weakening patent protection generates two contradicting effects on innovation and growth. Weakening patent protection lowers the (average) price of patented machines, thereby increasing machine utilization, output, aggregate saving, and investment. However, higher demand for machines shifts investment away from the R&D activity aimed at inventing new machine varieties, toward the formation of physical capital. The growth-maximizing level of patent protection is incomplete. Shortening patent length is more effective than loosening patent breadth in spurring growth, due to an additional positive effect on growth, that is decreasing investment in old patents. Welfare can be improved by weakening patent protection beyond the growth-maximizing level. [Paper]